E&RD growth to come from US, Germany and Japan, says LTTS CEO

The growth in engineering, research and development (E&RD) services, a mainstay of L&T Technology Services, will primarily happen in the US, Germany, Japan and West Asia over the next few years, said the company’s chief executive Amit Chadha.

“Europe, for us, will grow in double digits this year. For the next year as well, we are forecasting a double-digit growth. The composition of the growth will, however, change. A lot of AI (artificial intelligence) projects are going on; cybersecurity and digital manufacturing is also in demand,” Chadha said.

In addition, he said, plant engineering orders in these areas from clients looking to either upgrade their old manufacturing sites by refurbishing them or setting up digital twins of these units is a green shoot for the company.

LTTS, a mid-tier information technology firm, reached the $1 billion revenue milestone in 2023-24 2024. The company aims to touch $1.5 billion by the end of this fiscal, Chadha said, adding that a double-digit growth is possible for the company every year over the next three to five years.

The company, which works primarily in engineering services and focuses on the development of products and services, reported a net profit of Rs 1,304 crore for the January-March quarter.

“The big change that has happened in the last 10-15 years is that E&RD, which was a line item sitting somewhere in the overall product development, was now being highlighted and brought to the forefront,” said the company veteran, who joined LTTS in 2009.

The growth of outsourcing of E&RD spending in India is a little slow but is likely to pick up as more companies move to set up their plants in India since LTTS can exercise its niche in executive software-defined-everything projects in the country, he said.“Our customers remain global. We have 57 of the top 100 companies as our customers,” Chadha said.