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Key Conference Call Highlights

Financial Performance and Quality of Revenue

* Margin Expansion: EBITM for Q4FY26 expanded to 15.2%, representing a 40 bps sequential improvement. Management attributes this to improving the quality of revenue through strategic rationalization

* Large Deals: The company secured USD 855 Mn in large deal wins for FY26, a 40% increase over the previous year. Q4 alone contributed USD 182 Mn in TCV

* Dividend: The board recommended a final dividend of INR 40 per share, bringing the total FY26 dividend to INR 58 per share

Strategic Portfolio Realignment

* SWC Divestment: LTTS completed the divestment of the Smart World and Communication (SWC) business. While the telco infra and cyber portions were successfully internationalised, the Smart Cities portion was divested because it relied on local government and local jobs, making it difficult to scale globally

* Non-Strategic Exits: Beyond SWC, the company exited low-margin or nonstrategic businesses worth USD 19 Mn in annualized revenue. This restructuring is considered complete as of Q4, providing a clean baseline for FY27

Lakshya 31: The 5-Year Plan

* Growth Targets: LTTS aspires to a 13% to 15% revenue CAGR in USD terms with EBITM ranging between 16% and 17%

* 6 Strategic Bets: The company is focusing on software-defined mobility, plant build-out/modernisation, energy/industrial automation, next-gen compute/AI infra, software platforms in AI and medtech

* Revenue Mix Shift: Currently, these bets contribute less than 50% of revenue, but management expects them to represent over 70% of business within 5 years

Segment-wise Outlook

* Mobility: Stabilized in Q4 and is expected to grow starting Q1FY27, driven by North American investments in SDV and hybrid technology

* Sustainability: Grew 11% YoY and contributed over 50% of Q4 large deal wins. It reached a milestone with its first USD 50 Mn+ account

* Tech: Experienced subdued Q4 revenue due to conscious exits from nonstrategic business but is expected to resume growth in Q1FY27

Operational Metrics

* Headcount: Total headcount reached 23,830 after adding 522 people in Q4. This growth was driven by onboarding freshers in anticipation of deal rampups already won

* DSO Improvement: Days Sales Outstanding (DSO) improved significantly to 83 days (down from 93 in Q3), largely due to the SWC divestment and improved collection

AI and Technology Leadership

* Engineering Intelligence (EI): This is the core approach to embedding AI across products and processes to drive high-value outcomes

* Three AI Pivots: Management is integrating AI in three areas: internal productivity (targeting 10-40% gains), client processes (e.g., supply chain optimisation) and customer products (embedding AI directly into end-user devices)

* Intellectual Property: LTTS filed over 1,700 patents in FY26, with 237 specifically focused on AI and GenAI

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