- L&T Technology Services' EBIT margin rose to 16.3% in Q2 FY27, up 220 bps year-on-year
- Revenue per employee increased 8.9% in rupees but only 0.4% in dollar terms in Q2 FY27
- Revenue grew 12.1% year-on-year to Rs 3,040.4 crore, with $317.1 million in dollar terms
L&T Technology Services posted a stronger quarter on profitability, with its EBIT margin rising to 16.3% in the three months ended September 2026. But a closer look at revenue per employee shows that its growth in rupee terms owes much to the weaker rupee. The company earns about 87% of its revenue outside India, so a weaker rupee lifts its rupee revenue.
L&T Tech's revenue per employee rose 8.9% year-on-year in Q2FY27, but only in rupee terms, a calculation based on the company's results shows. In dollar terms, revenue per head barely moved, rising just 0.4%. The gap of about 8.5 percentage points is explained by the rupee. The company's realised exchange rate was 95.90 to the dollar, against 88.40 a year ago, so each dollar fetched 8.5% more rupees.
The EBIT margin came in at 16.3%, against 15.7% in the preceding quarter and 14.1% a year earlier, a gain of 220 basis points over the year. The company said it had reached its mid-16% margin aspiration ahead of schedule. The margin is for continuing operations and excludes a one-time gain of Rs 165 crore from the sale of its SWC business, which lifted reported net profit 66.8% to Rs 548.2 crore.
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The Revenue Per Head Math Explained
L&T Tech posted revenue of Rs 3,040.4 crore, up 3.4% sequentially and 12.1% year-on-year. In dollars, revenue was $317.1 million, up 3.3% year-on-year, or 4.8% in constant currency. Over the same year, headcount rose 2.9% to 24,035 from 23,359, an addition of 676 employees.
Dividing the quarter's revenue by year-end headcount, revenue per employee for the quarter was about Rs 12.65 lakh, against Rs 11.62 lakh a year ago, an increase of 8.9%. In dollar terms, it came in at about $13,190, against about $13,140, an increase of 0.4%.
The rupee accounts for the difference. The company's realised exchange rate was 95.90 to the dollar, against 88.40 a year ago.
Employee costs, the company's largest expense, came in at Rs 1,752.1 crore, up 10.5% from a year ago. Per employee, they rose 7.4% to about Rs 7.29 lakh from Rs 6.79 lakh, by our calculation.
Employee costs fell to 57.6% of revenue from 58.4% a year ago. Other expenses fell to 23.1% from 24.1%, and depreciation to 2.9% from 3.4%. The results do not break down what is included in other expenses. The company said gross margins improved across all its segments. Its overall gross margin was 32.4%, against 31.7% in June and 29.8% a year ago.
However, revenue per employee is a rough yardstick, and the picture changes with the currency used. In constant currency, which strips out the effect of exchange-rate moves, it rose about 1.8%, by our calculation, as revenue growth of 4.8% outpaced headcount growth of 2.9%. Per billable employee, the rise was about 1.4%.
The mix of work also matters. Offshore work was 55.9% of revenue, up from 52.1% a year ago. Offshore work generally earns less per employee than onsite work, so a higher offshore share can hold down revenue per employee.
The results documents do not say what share of L&T Technology Services' costs is in dollars, so they do not show how much of the margin gain came from the weaker rupee.
Notably, the results were declared after the market hours on Monday. The stock will react to the earnings scorecard when the trading resumes on Tuesday.
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