LTTS: The US$ 3 Billion Dream

Imagine a company working behind the scenes to power the future—where electric vehicles become software-driven, factories run on AI-powered automation, and cities transform into intelligent ecosystems. This company isn’t just adapting to change; it’s actively building the technology that will define the next decade.

With a bold vision to scale each of its three core verticals—Mobility, Sustainability, and Technology—to US$ 1 billion in revenue, it is securing high-value contracts, expanding into next-gen engineering solutions, and making strategic acquisitions to stay ahead of the curve. Driving this transformation is L&T Technology Services (LTTS), a company at the heart of digital engineering, AI, and industrial innovation.

The Path to US$ 1 Billion in Each Vertical

L&T Technology Services (LTTS) is not just an engineering services provider—it is building the foundation for next-generation technology across Mobility, Sustainability, and Technology. With a clear long-term goal of scaling each of these three verticals to US$ 1 billion in revenue, the company is executing a structured plan focused on high-value contracts, strategic acquisitions, and deep specialisation in critical domains.

In Mobility, LTTS is capitalising on the shift toward software-defined vehicles (SDVs), electrification, and autonomous driving. It has secured multi-year partnerships with leading global OEMs to develop next-gen vehicle architectures, advanced driver-assistance systems (ADAS), and powertrain electrification solutions. Additionally, the company is strengthening its semiconductor and embedded systems expertise, which is critical as vehicles become more software-driven.

In Sustainability, LTTS is expanding in energy efficiency, digital manufacturing, and smart infrastructure. It has been involved in designing and optimising industrial automation systems, developing AI-driven energy management solutions, and working with global energy firms to improve plant efficiency. The recent acquisition of Smart World & Communication (SWC) has strengthened its presence in 5G, cybersecurity, and smart city solutions, opening new growth avenues in urban infrastructure and industrial automation.

The Technology vertical, which focuses on digital engineering, telecom, and AI, is positioned for long-term, high-margin growth. LTTS is working with global telecom providers to modernise networks for 5G and beyond, while its Intelliswift acquisition has enhanced its capabilities in AI, cloud engineering, and software platforms. The company is also investing in AI-driven automation and digital twin technologies, which are becoming critical for businesses seeking efficiency and cost savings.

Additionally, the company is also pursuing inorganic growth opportunities, which is evident in the recent two acquisitions done by the company.

Acquisiton	Year	Value (US$ Million)	Importance
Intelliswift	2024	110 (9% of FY25 revenues)	Strengthens software product development, platform engineering, and AI capabilities. Expands presence in Silicon Valley and enhances partnerships with major tech firms.
Smart World & Communication	2023	96 (10% of FY23 revenues)	Enhances expertise in 5G, cybersecurity, smart infrastructure, and IoT. Expands LTTS’s role in critical infrastructure projects and smart cities.

To accelerate its journey toward US$ 1 billion in each vertical, LTTS is driving growth across Mobility, Sustainability, and Technology, each contributing a significant share to overall revenue.

The table below outlines the company’s current revenue distribution and the projected trajectory over the next five years.

Vertical	% of Revenue	FY25 Revenue	FY30 Revenue*	CAGR (%)
Mobility	34%	US$ 418 Million	US$ 1 Billion	19
Sustainability	31%	US$ 381 Million	US$ 1 Bilion	21
Technology	35%	US$ 431 Million	US$ 1 Billion	18

*However, the company has not specified the timeline for the target, we assume long-term means 5 years

Cumulatively, this would result in a CAGR of 20% in revenues over the next 5 years for LTTS to reach US$ 3 billion in revenues from the current revenues of US$ 1.23 billion in FY25.

Growth in Motion

The chart below illustrates LTTS’s revenue concentration by geography, highlighting its strong presence across key markets.

Over FY19-FY24, LTTS’s revenue grew at a 14% CAGR, driven by expanding digital engineering capabilities, large deal wins, and next-gen mobility solutions. EBIT margins remained in the 16-17% range, supporting a 16% EBIT CAGR during this period.

However, recent margin pressures—primarily due to lower-margin acquisitions (SWC, Intelli-swift), higher on-site costs, and temporary client spending cuts—have led to a decline to 15% in 9MFY25.

Looking ahead, LTTS aims to accelerate its growth trajectory, with revenue projected to grow at a 20% CAGR from FY25-FY30, reaching US$ 3 billion by FY30. EBIT margins are expected to recover to 17% by FY27 and remain stable thereafter, supported by operational efficiency, offshoring, and high-value contracts, resulting in a 23% EBIT CAGR over FY25-FY30, significantly outpacing the last five years.

A key driver of margin expansion is LTTS’s increasing offshore mix, which has already shifted from ~55% in FY21 to 58% in FY24, with a target to exceed 60% in the coming years. This transition will enhance cost efficiency, scalability, and overall profitability.

Large deal momentum remains strong, with total order wins of US$ 590 million (53% of TTM revenue) in the past 12 months, spanning key areas such as product integration, an EV program with a US-based OEM, and AI-driven automation in oil & gas.

These strategic wins further solidify LTTS’s position as a key player in global engineering transformation, strengthening its long-term revenue visibility.

Measured Against the Best

Companies like LTTS are best valued relative to industry peers, considering growth trajectory, profitability, and long-term scalability. A strong market position, higher-than-industry growth, and improving margins often justify a premium valuation, while deviations from these benchmarks can signal over- or under-valuation. Investors should also assess long-term demand drivers, the company’s ability to secure high-value contracts, and its shift toward higher-margin services, as these factors influence future earnings potential and valuation multiples.

Company	Revenue CAGR (FY25-FY27) (%)	EBIT CAGR (FY25-FY27) (%)	EBIT Margins (%)	1 - Year Forward P/E
Tata Elxsi	13	16	24	34x
Cyient	10	22	15	15x
KPIT Tech	15	18	17	35x
Tata Tech	15	20	16	28x
LTTS	16	20	16	30x
Average	14	19	17	28x

This table compares LTTS’s valuation and financial performance with industry peers across revenue growth, EBIT margins, and earnings multiples. LTTS leads in revenue CAGR (16%) and maintains strong EBIT growth (20%), though its EBIT margins (16%) are slightly below the industry average (17%).

What Could Drive or Derail LTTS?

Positive Triggers

Large Deal Wins – A US$ 100M+ contract in high-growth areas like AI, SDVs, or next-gen semiconductors
Strategic Acquisition – A high-margin, value-accretive buyout strengthening LTTS’s positioning in digital engineering
Margin Expansion Surprise – Faster-than-expected EBIT margin recovery beyond 17%, driven by offshore shift and pricing power

Negative Triggers

Major Client Loss – A key long-term customer scaling down or exiting contracts, impacting revenue visibility
Delayed Integration Issues – Acquisition-related inefficiencies leading to prolonged margin pressures or cost overruns
Sector-Wide ER&D Slowdown – A sharp cut in global R&D budgets due to macroeconomic headwinds, affecting deal momentum

Conclusion

LTTS isn’t just engineering the future—it’s redefining it. With a stronghold in high-growth areas like AI-driven automation, digital engineering, and next-gen mobility, the company is steadily advancing toward its US$ 3 billion revenue milestone. While near-term margin pressures from acquisitions have weighed on profitability, its shift toward offshore delivery, high-value contracts, and operational efficiencies sets the stage for long-term expansion.

As one of the fastest-growing players in the ER&D space, LTTS is positioned to outpace industry trends, with scalable verticals and a deep innovation pipeline. With a clear strategy, strong execution, and a growing global footprint, LTTS isn’t just keeping up with transformation—it’s leading it.