1. At a Glance
L&T Technology Services (LTTS) is the engineering arm of the mighty L&T Group, riding high on ER&D (Engineering, R&D) demand across MedTech, Auto, and Hi-Tech. A ROE machine at 22%+, strong global clientele, and 296 clients in 25 countries… but at 36x P/E, is this a precision-engineered stock or overdesigned optimism?
2. Introduction with Hook
Imagine an IT company that doesn’t make chatbots or websites—but builds tech for aircraft, medical devices, and next-gen semiconductors. That’s LTTS. If Infosys is chai, this is espresso—strong, niche, expensive.
- ROCE: 28.3%
- TTM Sales: ₹11,074 Cr
- Clients: 69 Fortune 500 + 53 of top 100 ER&D firms
- Problem? Growth is stalling… but valuation isn’t.
3. Business Model (WTF Do They Even Do?)
LTTS operates in the ER&D and digitalization space, helping large enterprises design products, simulate, test, and manage manufacturing.
Key Vertical Revenue (9M FY25):
- Transportation: 32%
- Industrial Products: 19%
- Telecom & Hi-Tech: 19%
- MedTech: 15%
- Plant Engineering: 15%
Services include:
- Hardware/Software product design
- Digital twin & smart manufacturing
- Compliance, testing, embedded tech
- AI + Cloud consulting
Think: a B2B brain for global manufacturing giants.
4. Financials Overview
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 | TTM |
|---|---|---|---|---|---|---|
| Revenue (₹ Cr) | 5,450 | 6,570 | 8,816 | 9,647 | 10,670 | 11,074 |
| Net Profit (₹ Cr) | 666 | 961 | 1,216 | 1,306 | 1,264 | 1,266 |
| OPM (%) | 18% | 22% | 20% | 20% | 18% | 17% |
| ROCE (%) | 27% | 31% | 36% | 34% | 28% | 28.3% |
| Dividend Payout (%) | 35% | 39% | 39% | 41% | 46% | — |
Steady. Predictable. Profitable. But margins are slipping a bit under salary pressure.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹4,347 |
| Market Cap | ₹46,098 Cr |
| EPS (TTM) | ₹119.82 |
| P/E | 36.4x |
| Book Value | ₹574 |
| P/B | 7.57x |
| Dividend Yield | 1.27% |
EduInvesting Fair Value Range
- EPS Growth FY26E: ₹135–₹145
- P/E Range: 28x–32x
- Fair Value: ₹3,800 – ₹4,600
Current price is baked-in with growth, but not extravagant. It’s priced like Apple, but running a bit like Dell.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26: ₹2,866 Cr revenue (+16% YoY), PAT ₹316 Cr
- Big Wins: 3 $50M+ deals signed in Q1, including a U.S. automotive major and a telecom infra giant
- Design Center in Texas launched
- AI & Cloud focus: Investing in platforms like S.E.T (Smart Embedded Tech)
- Management Change: New CHRO, hinting at talent strategy shift
7. Balance Sheet
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹21 Cr | ₹21 Cr | ₹21 Cr |
| Reserves | ₹4,414 Cr | ₹5,306 Cr | ₹6,059 Cr |
| Total Liabilities | ₹8,184 Cr | ₹8,483 Cr | ₹9,627 Cr |
| Net Worth | ₹4,435 Cr | ₹5,327 Cr | ₹6,080 Cr |
| Borrowings | ₹454 Cr | ₹659 Cr | ₹578 Cr |
Healthy balance sheet with ample cash flow and limited debt. Working capital well-managed.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash Flow (₹ Cr) |
|---|---|---|---|---|
| FY23 | 1,313 | -578 | -445 | +290 |
| FY24 | 1,493 | -233 | -658 | +602 |
| FY25 | 1,481 | -509 | -718 | +254 |
Strong, repeatable operating cash. Investing outflows for expansion, infra, and product dev.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 36% | 34% | 28.3% |
| ROE | 25% | 22% | 22.1% |
| OPM | 20% | 20% | 17% |
| D/E Ratio | 0.1 | 0.12 | 0.09 |
| Working Cap Days | 14 | 43 | 37 |
| Debtor Days | 89 | 82 | 86 |
A slight decline in margins and return ratios—but still elite by IT sector standards.
10. P&L Breakdown – Show Me the Money
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹8,816 Cr | ₹9,647 Cr | ₹10,670 Cr |
| Operating Profit | ₹1,761 Cr | ₹1,919 Cr | ₹1,892 Cr |
| Net Profit | ₹1,216 Cr | ₹1,306 Cr | ₹1,264 Cr |
| EPS | ₹114.77 | ₹123.28 | ₹119.64 |
Margins slipped slightly in FY25 due to employee costs and weaker Europe orders.
11. Peer Comparison
| Company | CMP ₹ | P/E | ROE % | PAT (Cr) | Sales (Cr) | OPM % | Mcap ₹ Cr |
|---|---|---|---|---|---|---|---|
| LTTS | 4,347 | 36.4 | 22.1 | 1,264 | 11,074 | 17.14 | 46,098 |
| Tata Technologies | 735 | 43.5 | 19.9 | 685 | 5,143 | 17.56 | 29,798 |
| Cyient | 1,304 | 23.6 | 12.8 | 613 | 7,360 | 15.47 | 14,479 |
| Netweb Tech | 1,956 | 96.9 | 24.0 | 114 | 1,149 | 13.93 | 11,088 |
LTTS leads on size, efficiency, and client base—Tata Tech rising fast, but not quite there yet.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 73.66% |
| FIIs | 5.18% |
| DIIs | 13.67% |
| Public | 7.47% |
| Shareholders | 2.19 lakh |
- Clean promoter control
- DIIs increasing their share
- Retail slowly exiting: might indicate valuation fatigue
13. EduInvesting Verdictâ„¢
LTTS is the gold standard for Indian ER&D services—reliable, respected, and well-run. Its niche model attracts sticky clients, and the balance sheet is a fortress. But…
- Growth has slowed
- Margins are compressing
- And you’re paying a tech premium for an engineering stock
It’s not hyped, but it’s also not cheap.
LTTS is the kind of stock that makes you money slowly and maturely—like a German car. No fireworks, but damn reliable.
Metadata
– Written by EduInvesting Analyst Team | 16 July 2025
– Tags: LTTS, L&T Technology Services, Engineering R&D, ER&D, MedTech, Semiconductors, AI, IT Services, Midcap IT, Digital Engineering
