LTTS Q2 FY27: Margins Rise to 16.3% as AI Deals Grow

L&T Technology Services Q2: Margins Expand, AI Deals Drive Growth L&T Technology Services (

) reported a stronger-than-expected Q2 FY27 performance, with improving margins, AI-led deal wins and management’s confidence in a stronger second half driving investor interest. Key Q2 FY27 Highlights - Revenue increased 3.4% quarter-on-quarter to ₹3,040 crore, up 12.1% year-on-year. - EBIT margin expanded 60 basis points sequentially to 16.3%, reaching the company’s mid-16% target earlier than expected. - Adjusted profit after tax rose 19.7% year-on-year to ₹380 crore. - Large-deal total contract value exceeded $200 million, with AI-related deals accounting for more than 50%. - Annualised AI-led revenue reached approximately $120 million, or around 9.5% of quarterly revenue. Why Are Analysts Still Cautious? Brokerages have raised their target prices but remain measured on the stock’s outlook. Motilal Oswal retained its Neutral rating with a ₹3,850 target, while Nuvama maintained Hold with a ₹3,450 target. The key concerns are the gradual recovery in automotive and technology spending, the sustainability of deal conversion and potential margin pressure from wage hikes in Q3. My View LTTS is showing encouraging signs of an operating recovery. Margin expansion, AI-led contracts and strength in the sustainability business support the outlook, while management expects the second half of FY27 to be stronger. However, the next challenge is converting large deal wins into consistent revenue growth while protecting profitability. Wage increases, uneven end-market demand and valuation will remain important monitorables. The investment case is increasingly linked to whether AI and engineering intelligence can deliver measurable, profitable growth—not simply generate new deal announcements.