L&T Technology Services shares decline 5% on weak revenue; here’s what analysts said after Q3 FY26 earnings

At 10:55 AM, shares of the firm were seen at ₹4,068.30 apiece on the National Stock Exchange, declining 4.14%, with market capitalisation standing at ₹43,112.21 crore.

LTTS on Thursday reported a consolidated net profit of ₹303 crore for the quarter ended December 31, 2025 (Q3 FY26), down 8% sequentially from ₹329 crore in Q3 FY26. On a year-on-year (YoY) basis, it registered a decline of 6%.

The company’s revenue from operations for the quarter under review came in at ₹2,924 crore, rising 10.2% on both a QoQ and YoY basis.

Revenue in US dollar terms stood at $326.3 million, up 4.6% YoY while down 3.2% on a quarter-on-quarter basis. In constant currency, revenue was down 2.8% QoQ while growing 4% YoY.

EBITDA, or earnings before interest, taxes, depreciation, and amortisation for the quarter, came in at ₹515 crore, up 4% QoQ. 

EBIT, or earnings before interest and taxes, for the company came in at ₹4.27 crore. EBIT margin stood at 14.6%.

LTTS reported strong deal momentum in Q3, with several large deal wins during the quarter. These included a $70 million engagement from a global OEM, a $30 million deal, a $20 million programme, and five additional deals each valued at over $10 million.

At the end of Q3 FY26, the patent portfolio of L&T Technology Services stood at 1,655, out of which 1,007 are co-authored with clients and the rest are filed by LTTS. By the end of the reporting quarter, LTTS’ employee strength stood at 23,639.

Here’s what the management said

“We sustained the momentum in large deal wins, delivering an average TCV of ~$200 million for five consecutive quarters. The sustainability segment continued to grow double-digit on a YoY basis, while mobility is seeing a turnaround,” said Amit Chadha, CEO & Managing Director, L&T Technology Services Limited.

Chadha said the company’s AI suite of offerings is evolving with the launch of new agentic AI platforms, as it pivots towards delivering full-stack engineering intelligence solutions that integrate physical and digital AI for clients’ products and processes.

He added that, in line with the five-year Lakshya plan, the company is doubling down on value-accretive, high-growth and high-margin areas, which is already yielding results, as reflected in a 120-bps quarter-on-quarter improvement, with Q3 EBIT margins at 14.6%.

Here’s what analysts said following earnings

Although L&T Tech continues to be among the strongest players in ER&D capabilities, HSBC flagged weaker near-term growth compared with peers.

They expect EBIT margins to recover steadily over FY26–28F. The stock is currently trading at 29x FY27F EPS, with a key upside risk being stronger-than-expected growth and margin improvement.

This decision resulted in a $15 million revenue loss in Q3, implying an annualised run rate impact of about $60 million. The poor exit rate of -1% is expected to be a headwind for FY27 growth, the analysts further added. However, the move is supporting margin recovery, with margins already improving to 14.6%, and management now targeting 16.5% margins earlier than its guided timeline of Q4 FY27–Q1 FY28.