BENGALURU (Reuters) – Indian engineering research and development services provider L&T Technology Services cut its revenue growth forecast for the current financial year on Tuesday, citing longer deal decision cycles and macroeconomic challenges.
The unit of engineering conglomerate Larsen and Toubro now expects revenue in dollars for this fiscal year ending March to grow 17.5%-18.5% in constant currency, as opposed to the previous estimate of a 20% jump.
“While longer term trends for ER&D remain strong, in the short term we are seeing longer decision cycles and incremental headwinds from the macro-economic stress in various geographies,” CEO Amit Chadha said in a statement.
L&T Technology follows larger IT service providers Infosys and HCLTech, which last week cut revenue outlook after clients in major revenue-generating markets of the U.S. and Europe scaled back spending amid fears of an economic slowdown.
L&T Technology, however, reported consolidated net profit for the second quarter at 3.15 billion rupees ($37.85 million), up from 3 billion rupees a year ago.
During the quarter, the company won seven deals worth more than $10 million each across all industry segments, it said in a filing.
Revenue from operations climbed 4.6% to 23.87 billion rupees in the quarter, led by a 15% rise in revenue in its mainstay transportation segment.
The company restated year-ago figures to incorporate results of Smart World and Communication, a business it purchased from its parent earlier this year.
L&T Technology’s shares closed down 1.6% lower ahead of the results. They have climbed 25.2% for the year so far, compared with an 11% gain in the Nifty IT index.
($1 = 83.2207 Indian rupees)
(Reporting by Rama Venkat in Bengaluru; editing by Eileen Soreng)