Are L&T Technology latest results good or bad?

L&T Technology Services (LTTS) reported its financial results for the quarter ending September 2025, showcasing a mixed operational performance. The company achieved a consolidated net sales figure of ₹2,979.50 crores, reflecting a year-on-year growth of 15.80%, which is a significant improvement compared to the previous year's growth rate of 7.81%. This indicates the company's ability to secure new contracts and maintain revenue momentum despite challenging market conditions.
However, the net profit for the same quarter stood at ₹328.70 crores, which represents a modest year-on-year growth of 2.85%. This profit growth is notably lower than the revenue growth, suggesting that while sales are increasing, profitability is facing pressures. The operating profit margin was reported at 16.47%, which, although improved sequentially by 34 basis points from the previous quarter, is down from 18.11% in the same quarter last year. This decline in margin highlights ongoing cost pressures, likely due to wage inflation and competitive pricing dynamics within the engineering services sector.

The company's balance sheet remains robust, characterized by a debt-free status and a net cash position of ₹2,526 crores, providing it with strategic flexibility. The return on equity (ROE) was recorded at 20.83%, indicating efficient capital deployment, although it is lower than historical averages.

Overall, while L&T Technology Services demonstrated strong revenue growth, the significant lag in profit growth and margin compression raises concerns about its operational efficiency and cost management. The company has seen an adjustment in its evaluation, reflecting these mixed results and the broader challenges faced in the IT services sector. Investors and stakeholders will need to monitor future performance closely to assess the sustainability of revenue growth and the potential for margin recovery.