L&T Tech Services Q1 results preview: Net profit likely to rise 3% to Rs 320 crore, margin may be under pressure

Engineering services company L&T Technology Services' shares reeled under pressure on Tuesday as investors awaited the IT company's quarterly results due later in the day. LTTS shares declined by as much as Rs 78.3 or 1.9 per cent to Rs 4,021 apiece on BSE. 

What to expect in L&T Tech Services Q1 earnings report?

According to Zee Business research, L&T Tech Services (LTTS) is estimated to report a net profit of Rs 320 crore for the quarter ended June 30, 2023, marking an increase of 3.2 per cent on a quarter-on-quarter basis. 

The analysts expect its revenue in rupee terms to grow 12.1 per cent sequentially to Rs 2,350 crore and that in dollar terms to expand 12.3 per cent to $286.5 million. The company's revenue growth in constant currency terms is pegged at 12.1 per cent, according to the research. 

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LTTS's acquisition of the Smart World and Communication (SMC) business of its parent L&T is expected to aid its revenue growth but pose pressure on its margin, according to Zee Business research. 

L&T Technology Services' margin — a key measure of profitability — is pegged at 17.1 per cent for the April-June period, which translates to a fall of 170 basis points on a sequential basis.

Analysts will closely track the company's earnings for full-year guidance on revenue and margin. 

How LTTS fared in Q4 

For the quarter ended March 2023, L&T Tech Services reported a net profit of Rs 310 crore — a quarter-on-quarter rise of two per cent. Its revenue in rupee terms grew 2.3 per cent sequentially to Rs 2,096 crore and 2.9 per cent in dollar terms to $255.1 million. The company's margin remained flat on a quarter-on-quarter basis, at 18.7 per cent.   

LTTS share price: Past performance

L&T Tech Services shares appreciated 16.4 per cent in value in the June quarter, outperforming a 10.5 per cent gain in the Nifty index. As of July 17, LTTS shares have grown 32.5 per cent in value in the past one year while the Nifty rose 23.4 per cent.

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