LTM Ltd (LTM) Q1 FY27 Results: Analysis, Positives, Concerns & Outlook

LTM Ltd's Q1 FY27 numbers came in mixed, with revenue of Rs. 11,608.00 Cr (+18.00% YoY) and PAT growth of +17.10% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

LTM delivered strong revenue growth of 18% YoY with margin expansion (EBIT +120bps YoY) and operating leverage. However, reported PAT was inflated by a one-time gain, and normalized PAT grew only 5% YoY. A forex swing and rising sub-contracting costs are concerns, but the BFSI recovery and sustained order inflow support near-term outlook.

Key Investment Insights

Key Positives

• Revenue grew 18.0% YoY to Rs.11,608 Cr, with constant currency growth of 6.4% YoY.
• EBIT margin expanded 120 bps YoY to 15.5%, and EBITDA margin expanded 100 bps YoY to 17.8%.
• EBITDA grew 24.9% YoY, outpacing revenue growth of 18.0%, showing operating leverage.
• Order inflow remained above $1.5 Bn for the seventh consecutive quarter at $1.68 Bn.
• BFSI segment revenue recovered 6.3% QoQ (3.0% QoQ in USD), marking a potential turn after softness.
• Client de-concentration: Top 5 client share declined to 23.5% from 27.3% a year ago.

Risk Factors

• Normalized PAT (excluding one-time gain of Rs.197.8 Cr) grew only 5.4% YoY, compared to reported 17.1%.
• Sub-contracting expenses surged 78.0% YoY and 19.3% QoQ, indicating increased reliance on external talent.
• Forex swing of ~Rs.395 Cr from gain to loss impacted other income and overall profitability.
• Cash flow from operations as % of PAT declined to 78.8% from 96.3% in Q4, due to working capital outflow.
• Sales & support headcount decreased by 245 QoQ, while total headcount declined by 64.