L&T Technology Services Ltd., an engineering R&D services company and a subsidiary of Larsen & Toubro Ltd., is looking at widening its global customer base, as companies are accelerating their investment in digital engineering to build smart products. To further broaden its services offering, the company is looking for acquisitions, CEO & MD Dr. Keshab Panda said in an interview. Edited excerpts:
How was the performance in FY18 and Q4? What led to this performance?
We had another year of robust growth driven by strong demand for digital engineering services, eventually helping us post industry leading performance. In FY18, our dollar revenue grew 20% to $580 million, net profit increased to ₹506 crore, up 19% YoY. In the fourth quarter, dollar revenue grew to $162 million up 34% YoY and net profit at ₹158.8 crore was up 66%.
What are the new areas the company is focussing on... the new markets you are exploring? How has the company gained from demand revival in the U.S. and Europe?
U.S. and Europe continue to be strong markets and we are seeing a revival in plant engineering, as manufacturers increase their capex spend. The demand for digital engineering based transformation has helped us register strong growth across all the five key vertical focus of ours namely — transportation, industrial products, telecom & hi-tech, medical devices and process engineering. As a strategy, our T-30 focus i.e. of focussing on our major customers for growth, is shaping up very well which is evident from our numbers.
What is your investment plan for FY19?
We will continue to invest in new age technologies involving perceptual engineering that will make machines and products intelligent using the five senses (touch, sight, sound, taste and smell) and the ability to think and learn. Human Machine Interface, Artificial Intelligence, Machine Learning, Image & Voice Processing, Neural Networks, Virtual Reality, Sensor Technology and Collaborative Robotics are critical technologies for the future and across, which we will see increased R&D activity.
We are also scouting for inorganic growth opportunities [acquisitions] in niche areas and investing in people through various re-skilling initiatives undertaken by L&T Technology Services in AI, Embedded Technologies and Collaborative Robotics, among others.
How many people are you planning to hire this year and where?
We are focussing on hiring mainly in India through lateral hires as well as freshers from engineering colleges. We recently concluded TECHgium, our first-of-its-kind initiative in India to scout for and recognise the best of engineering talent among the fresher community. Through TECHgium, we are planning to offer placements to 100 students from various engineering colleges.
What are the new trends in technology?
Looking ahead, we see large customers across the globe accelerating their investments in digital engineering and partnering with us to build smart products, create factories of the future embedded with new age technologies, and increase returns from their legacy products. Our revenues from digital & leading-edge technologies increased to 26% of the overall business in FY18, driven by investment into newer areas such as NB-IoT, Machine Learning and Embedded AI and creation of new labs to spur research and innovation.
