The comments come after LTTS reported a strong first quarter for FY27 and beat analyst estimates, with revenue rising 11.5% year-on-year to Rs 2,940 crore, while net profit increased 17.4% to Rs 352 crore.
Reshab Shaw
July 15, 2026 / 09:51 IST
LTTS
- LTTS sees opportunities in European auto slowdown.
- AI helps automakers cut costs, boosts LTTS’s profit.
- Diversified strategy aids LTTS amid auto sector pressure.
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L&T Technology Services (LTTS) believes the slowdown among European automakers is creating fresh business opportunities as manufacturers increasingly turn to artificial intelligence (AI) and engineering partners to cut costs and improve efficiency, even as parts of the sector remain under pressure from intensifying competition.
The comments come as Europe’s automotive slowdown weighs on India’s engineering research and development (ER&D) industry, with automakers curbing engineering spending amid weak demand and macroeconomic uncertainty. Several Indian engineering firms, including KPIT Technologies, Tata Elxsi, and Tata Technologies, have flagged pressure from European auto clients.
“We do agree that European OEMs are going through a challenge, but that’s also an opportunity because some of these OEMs are looking to consolidate and also see how they can leverage AI to provide cost optimisation opportunities,” Executive Director and Chief Financial Officer Rajeev Gupta told Moneycontrol in an interview.
Unlike some peers that have flagged weakness in automotive engineering demand, LTTS said its presence across North America, Europe, and multiple mobility sub-segments such as trucks, off-highway vehicles, and rail has helped cushion the impact.
“We’ve seen growth in trucks, off-highways and rail, while the North America auto piece has been at an uptick. Our diversified strategy and our ability to work across geographies is helping us,” Gupta added.
The comments come after LTTS reported a strong first quarter for FY27 and beat analyst estimates, with revenue rising 11.5 percent year-on-year to Rs 2,940 crore, while net profit increased 17.4 percent to Rs 352 crore.
EBIT margin expanded 200 basis points year-on-year to 15.7 percent, reflecting improved operational efficiency.
While sustainability remained the fastest-growing business, mobility also returned to growth after several muted quarters.
According to Gupta, nearly half of LTTS’ large deal wins during the quarter came from the mobility segment, signalling improving demand despite the broader challenges facing the global automotive industry.
Gupta also dismissed concerns that AI adoption could reduce revenues for engineering companies, arguing that AI is instead helping LTTS improve profitability through higher-value consulting and engineering work.
“AI is actually revenue accretive to us. There is a consulting layer that helps us get projects at better margins,” he said.
Reshab Shaw Covers IT and AI
first published: Jul 15, 2026 09:51 am
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