L&T Technology Services booked a ₹350 crore loss by selling 10% of its revenue to pivot to AI. The engineering firm hopes this painful exit will fix its sliding EBITDA margins and differentiate it in a crowded market. More than half its deals are now AI-led, showing fast execution on the new strategy.
How We Got Here
LTTS took over its parent's Smart World and Communication (SWC) business in 2023. By September, the firm sold SWC to AMI Paradigm Solutions, booking a ₹350 crore loss to exit low-margin segments.
The Numbers
- The SWC business, which generated ₹1,028 crore in FY25 revenue, was sold to Hyderabad-based AMI Paradigm Solutions.
- LTTS projects show AI can cut project timelines by 3-4X and reduce costs and headcount by up to 30%.
- CEO Amit Chadha reported AI-led deals now constitute over 50% of the company's large deal technology crossover ventures.
- The shift has improved EBITDA margin from 17.5% in Q2 FY26 to 19.3% in Q2 FY27, with quarterly revenue exceeding ₹3,000 crore.
- An AI platform called Ainfonix helps American refinery engineers find valve specs in minutes, a process that used to take days.
What Happens Next
🇮🇳 Why This Matters for India
For Bangalore-based engineering services firms targeting global clients, LTTS’s playbook offers a blueprint for how to re-skill and re-position for the AI boom.
The Take
The market is missing the real challenge here. LTTS must build proprietary AI models and IP, beyond mere implementation, to truly justify that ₹350 crore bet over the next 18-24 months.
Source:
The Ken ↗