India's L&T Technology retains FY rev forecast, Q1 rev misses view

L&T Technology Services

18/07/2024 13:24

BENGALURU, July 18 (Reuters) - Indian engineering
research and development services provider L&T Technology
Services  LTEH.NS  retained its full-year revenue growth
forecast of 8%-10% but missed quarterly revenue expectations on
Thursday due to prolonged weakness in its key U.S. market.
        The company's revenue grew about 7% to 24.62 billion
rupees ($294.4 million) for the three months ending June 30,
missing analysts' expectations of 25.31 billion rupees, per LSEG
data.
    The United States is L&T Technology's largest market,
constituting nearly 53% of its revenue. The company's revenue
from the North America market fell 1.4% in the quarter.
    Revenue in its Indian and European segments rose 12.2% and
23.7%, respectively.
    The company won seven orders totalling $100 million in the
June quarter, nearly flat from a year ago.
    Indian technology exporters have grappled with sluggish
demand through the last fiscal year as clients focused on cost
cuts to counter higher interest rates. L&T Technology's revenue
in financial year 2024 rose 9.4%, its slowest full-year revenue
growth since it fell in fiscal year 2021.
    While the impact was felt across the sector, research and
development firms such as L&T Technology, which counts aircraft
engine suppliers and automobile makers as its clients, were less
affected than IT services companies.
    However, analysts believe the worst is over for the
technology sector.
    Companies in the sector, which earn a significant share of
revenue from the United States, stand to benefit from increased
client spending due to likely interest rate cuts in the world's
biggest economy later this year, according to analysts.
    Last week, L&T Technology's bigger peers Tata Consultancy
Services  TCS.NS  and HCLTech  HCTL.NS  marginally beat revenue
estimates.
    While HCLTech projected growth, TCS said it is "too early"
to predict sustained growth in future quarters.
    Infosys, India's No.2 IT services exporter  INFY.NS , raised
its full-year growth forecast and beat its first-quarter revenue
estimates earlier in the day.

($1 = 83.6292 Indian rupees)

 (Reporting by Varun Hebbalalu in Bengaluru; Editing by Sonia
Cheema)
 ((varunvyas.hebbalalu@thomsonreuters.com;))