Smart World & Communication (SWC) business that L&T Technology Services (LTTS) acquired from its parent firm Larsen & Toubro last year is helping the IT engineering services firm to secure more deals in India, Amit Chadha, CEO and MD, said in an interaction with FE.
LTTS saw its India market revenue grow by 33.4% year on year in the December quarter of this fiscal. India contributed 21.5% of its revenue in the third quarter. Explaining the uptick in revenue from India at a time when North America is seeing slow growth for the IT industry, Chadha said, apart from SWC business, the other factor that is helping their India business is because many of their MNC manufacturer clients are setting up shops in India.
He added, “These MNC clients need engineering support. They are taking help from us in plant engineering, product engineering and other services. Third, we work with GCCs. Many semiconductor companies and telecom infra companies are setting up GCCs. There is also a huge demand for specific specialised engineering services around cyber security and other areas.”
Last week, LTTS bagged a cyber security deal worth around $100 million (Rs 800 crore) from the Maharashtra state cyber department. As part of it, LTTS will develop secure and digitally-interconnected solutions for smart and safe cities.
Chadha also explained how they are leveraging SWC’s capability globally. Hitherto, SWC was catering to domestic market. “We have won some large deals leveraging SWC. We are eyeing large contracts both in India and abroad that will give us both scale and profit.” He added the company has been able to improve margins as well by taking SWC global.
Speaking about artificial intelligence (AI) and Gen AI, he said, “We are running about 100 POCs (proof of concepts) right now and 70% of them are now paid and 30% not paid. We also have about 250 engineers working on AI chips for our customers for billable assignments.”
On hiring, he revealed that LTTS has added more than 2000 employees to its net headcount this fiscal and will add at least another 2,500 next fiscal.
When asked about the company seeing increase in fixed price contract, Chadha explained, “We are deliberately moving towards more fixed price contracts. The advantage is we can file patents for the customers. Managing contracts in fixed price contracts is a lot easier. You can decide who to put there and how to juggle resources there. It also has slightly higher margins if you do it better. Additionally, vendors become sticky with customers and even accountability is better here.”
