L&T Technology Services Q1 profit slumps 42.5% to Rs 117.3 crore; to acquire Orchestra Tech for Rs 187 crore

L&T Technology Services (LTTS), engineering services arm of Larsen and Toubro Group, on Thursday reported 42.5 per cent decline in consolidated net profit at Rs 117.3 crore for the first quarter ended June 30, 2020, as against Rs 203.9 crore in the same period last year. On the quarter-on-quarter basis, the profit fell 42.7 per cent from Rs 204.8 crore in the March quarter of FY20.

The engineering services company posted consolidated revenue of Rs 1,294.7 crore in June quarter of 2020 versus Rs 1,347.5 crore in the year-ago period, registering a fall of 3.9 per cent. On a sequential basis, revenue declined 10.7 per cent as against Rs 1,446.6 crore in March quarter.

"During the quarter, LTTS won 9 multi-million dollar deals across all major industry segments which include one deal with TCV of $30 million plus and two deals with TCV of $15 million plus," the company said in a filing to the Bombay Stock Exchange.

On an annual basis, the company has increased its $10 million+ clients by 5 and its $1 million+ clients by 3, it said.

"At the end of the first quarter, the patents portfolio of L&T Technology Services stood at 525, out of which 385 are co-authored with its customers and the remaining 140 are filed by LTTS," it said in the filing.

As of June 30, 2020, L&T Technology Services' employee strength stood at 16,641.

In a separate development, L&T Technology Services announced that it will acquire 100 per cent stake in Orchestra Technology, a specialist technology solutions provider for the telecom industry, in all cash deal worth $25 million (Rs 187 crore). The amount will be paid in two tranches of $11 million (Rs 82.6 crore) and $14 million (Rs 105 crore). The deal is expected to close by December 2020.

Based in Texas, Orchestra will enhance its offerings in the areas of network engineering and enterprise mobility. The acquisition will also provide the company strategic access to telecom service providers who are investing in next generation digital systems for 5G and IoT networks, it said.

Orchestra Technology is a specialist technology partner for wireless and mobile eco-systems. It had a turnover of around Rs 110 crore in the year 2019, and currently employs around 80 people.

Ahead of Q1 earnings, shares of L&T Technology Services closed Thursday's trade at Rs 1,439.20, down 1.48 per cent, against previous closing price of Rs 1,460.75 on the BSE.

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