Changes for page L&T Technology Services Ltd

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  = Company Overview =
--L&T Technology Services Limited (NSE:LTTS) is a global leader in Engineering and R&D (ER&D) services. With 525 patents filed for 53 of the Global Top 100 ER&D spenders, LTTS lives and breathes engineering. The company's innovations speak for themselves – World’s 1st Autonomous Welding Robot, Solar ‘Connectivity’ Drone, and the Smartest Campus in the World, to name a few.{{footnote}}https://www.ltts.com/about-us/company-profile{{/footnote}}
++L&T Technology Services Limited (NSE:LTTS) is a global leader in Engineering and R&D (ER&D) services. With 525 patents filed for 53 of the Global Top 100 ER&D spenders, LTTS lives and breathes engineering. The company's innovations speak for themselves – World’s 1st Autonomous Welding Robot, Solar ‘Connectivity’ Drone, and the Smartest Campus in the World, to name a few.{{footnote}}https://www.ltts.com/about-us/company-profile{{/footnote}}
  LTTS’ expertise in engineering design, product development, smart manufacturing, and digitalization touches every area of human lives - from the moment one wakes up till the time one goes to bed. With 45 Innovation and R&D design centres globally, the company specialize in disruptive technology spaces such as 5G, Artificial Intelligence, Collaborative Robots, Digital Factory, and Autonomous Transport.
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  === Product Engineering               ===
--At LTTS, product engineering is its forte. LTTS has teams of specialists that can assist you in every step of your product development journey – starting with design & prototyping to VLSI, software, hardware and security engineering.{{footnote}}https://www.ltts.com/services/product-engineering{{/footnote}}
++At LTTS, product engineering is its forte. LTTS has teams of specialists that can assist you in every step of your product development journey – starting with design & prototyping to VLSI, software, hardware and security engineering.2
  * CAE & CFD
  * CAx Automation
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  === Manufacturing Engineering               ===
--Unconventional times call for unconventional shifts in manufacturing. In this new normal, what manufacturers need is the ability to do more with less, deliver services remotely through data and cloud platforms, reduce design timelines, and increase production throughput.{{footnote}}https://www.ltts.com/services/manufacturing-engineering{{/footnote}}
++Unconventional times call for unconventional shifts in manufacturing. In this new normal, what manufacturers need is the ability to do more with less, deliver services remotely through data and cloud platforms, reduce design timelines, and increase production throughput.3
  In short, it is time to be F.R.U.G.A.L – Flexible, Remote, Unconventional, Glocal and Agile.
@@ -67,7
+67,7 @@
  === Operations Engineering               ===
--From streamlining your supply chain operations, to ensuring efficient building management, and running your product servicing & support requirements, take a look at how LTTS can help unlock massive operational efficiency for your organization.{{footnote}}https://www.ltts.com/services/operations-engineering{{/footnote}}
++From streamlining your supply chain operations, to ensuring efficient building management, and running your product servicing & support requirements, take a look at how LTTS can help unlock massive operational efficiency for your organization.4
  * Connected Service Support
  * Integrated Content Management
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  === Engineering Consultancy               ===
--At LTTS, its holistic understanding of multiple industries has helped it engineer crosspollinovation – the ability to assimilate the best technologies and practices from multiple industries and integrate it into your product. Learn how its consultants can help build your next big idea.{{footnote}}https://www.ltts.com/services/engineering-consultancy{{/footnote}}
++At LTTS, its holistic understanding of multiple industries has helped it engineer crosspollinovation – the ability to assimilate the best technologies and practices from multiple industries and integrate it into your product. Learn how its consultants can help build your next big idea.5
  * Industry 4.0
  * Product Strategy
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  == Solutions               ==
--Company’s next-gen engineering solutions that are uniquely designed to address complex business challenges.{{footnote}}https://www.ltts.com/solutions{{/footnote}}
++Company’s next-gen engineering solutions that are uniquely designed to address complex business challenges.6
  * i-BEMS
  * Connected Security
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  = Business Overview               =
--L&T Technology Services Limited (LTTS) is a leading global pure-play Engineering Research & Development (ER&D) services company. It offers design and development solutions throughout the product development chain and provides services and solutions in the areas of mechanical and manufacturing engineering, embedded systems, engineering analytics and plant engineering. LTTS’ customer base includes 69 Fortune 500 companies and 53 of the world’s top ER&D companies, across Industrial Products, Transportation, Telecom & Hi-tech, Medical Devices, and Plant Engineering. The business also provides digital engineering advisory services to some of the world’s leading enterprises. The key differentiators for LTTS’ business are its customer-centric industry innovations, domain expertise, and multi-vertical presence spanning major industry segments.{{footnote}}https://www.ltts.com/system/files/2020-06/LTTS%20AR%202019-20.pdf{{/footnote}}
++L&T Technology Services Limited (LTTS) is a leading global pure-play Engineering Research & Development (ER&D) services company. It offers design and development solutions throughout the product development chain and provides services and solutions in the areas of mechanical and manufacturing engineering, embedded systems, engineering analytics and plant engineering. LTTS’ customer base includes 69 Fortune 500 companies and 53 of the world’s top ER&D companies, across Industrial Products, Transportation, Telecom & Hi-tech, Medical Devices, and Plant Engineering. The business also provides digital engineering advisory services to some of the world’s leading enterprises. The key differentiators for LTTS’ business are its customer-centric industry innovations, domain expertise, and multi-vertical presence spanning major industry segments.7
  == Business Segments               ==
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  = Financial Overview               =
--== Income               ==
++Income
++
++
  The company's revenue from continuing operations increased by 10.6% to Rs 56,191 Million for the year ended March 31, 2020 from Rs 50,783 Million for the year ended March 31, 2019, with growth being led primarily by the Transportation, Plant Engineering, and Medical Devices segments.
--The company's USD revenue from continuing operations comprise revenues denominated in USD, in addition to amounts in foreign currencies across its operations, that are converted into USD using the day-end exchange rates for the relevant period. Such revenues increased by 8.7% to USD 786 Million for the year ended March 31, 2020 from USD 723 Million for the year ended March 31, 2019.
--**Transportation   **
++The company's USD revenue from continuing operations comprise revenues denominated in USD, in addition to amounts in foreign currencies across its operations, that are converted into USD using the day-end exchange rates for the relevant period. Such revenues increased by 8.7% to USD 786 Million for the year ended March 31, 2020 from USD 723 Million for the year ended March 31, 2019.
++
++Segmental
++
++
++Transportation
++
++
  Transportation segment is its largest segment by revenue and contributed 35.4% of the company’s total revenue in FY’20 vs 31.9% of the total revenue in FY’19. The segment clocked a healthy topline growth of 22.7% Y-o-Y. The operating margin of this segment has increased from 16.7% in FY’19 to 17.7% in FY’20. Increase in operating margin is due to increase in revenue from FY’19 to FY’20.
--**Telecom & Hi-tech   **
++Telecom & Hi-tech
++
++
  Telecom segment is the second largest segment. The segment has contributed 20% of the company’s total revenue in FY’20 vs 27.1% of the total revenue in FY’19. The operating margin of this segment has improved to 16.5% in FY’20 from 15.6% in FY’19.
--**Industrial Products  **
++Industrial Products
++
++
  The Industrial Products segment is the third largest segment and has contributed 19.3% of the company’s total revenue in FY’20 vs 20.1% of the total revenue in FY’19. The segment has shown a decent growth in revenue by 6.5% Y-o-Y. The operating margin of this segment has improved from 24.9% in FY’19 to 26.1% in FY’20.
--**Plant Engineering **
++Plant Engineering
++
++
  Plant Engineering contributed 16.2% of the company’s total revenue in FY’20 vs 14.2% of the total revenue in FY’19. The segment showed an increase of 26% Y-o-Y. The operating margin of this segment has significantly increased from 22.7% in FY’19 to 25.4% in FY’19.
--**Medical Devices      **
--Medical Devices segment is the smallest segment and contributed 9.1% of the company’s total revenue in FY’20 whereas in FY’19 it was 6.7%. This segment grew by 51.4% Y-oY and was the fastest growing segment in FY’20. The operating margin of this segment has improved from 24.8% in FY’19 to 27.3% in FY’20.
++Medical Devices
--**Other Income**
--The company's Other Income primarily consists of income from foreign exchange gains investments in mutual funds, interest received, net gain on fair value of investment and miscellaneous income. In miscellaneous income, the income from sale of export licenses (obtained as a result of government incentives) increased by Rs 655 Million in FY 20 (FY20: Rs 931 Million and in FY19: Rs 276 Million) which was more than offset by the absence of the one-time income of Rs 780 Million registered in FY19 (which was towards a transaction with one of the Company’s customers), leading to decrease in its Other Income to Rs 2,091 Million for the year ended March 31, 2020 from Rs 2,228 Million for the year ended March 31, 2019.
++Medical Devices segment is the smallest segment and contributed 9.1% of the company’s total revenue in FY’20 whereas in FY’19 it was 6.7%. This segment grew by 51.4% Y-oY and was the fastest growing segment in FY’20. The operating margin of this segment has improved from 24.8% in FY’19 to 27.3% in FY’20.
--The Company designates foreign exchange forward contracts as hedge instruments in respect of foreign exchange risks. These hedges are accounted for as cash flow hedges. The Company uses hedging instruments that are governed by the policies of the Company which are approved by the Board of Directors, which provide written principles on the use of such financial derivatives consistent with the risk management strategy of the Company.
--== Expenses                ==
++Expenses
++
  The company's expenses include employee benefit expenses, other operating expenses, change in contingent consideration, finance costs, depreciation and amortization and tax expenses. The total of such expenses increased by 10.4% to Rs 50,058 Million for the year ended March 31, 2020 from Rs 45,327 Million for the year ended March 31, 2019, primarily as a result of an increase in employee benefit expenses, which was attributable to the growth of its operations and annual increase in salaries.
++
  Employee benefit expenses comprise salaries (including overseas staff expenses), share based payment, staff welfare, contributions to provident funds and contributions to gratuity funds.
++
  The company's employee benefit expenses increased by 8.6% to Rs 32,916 Million for the year ended March 31, 2020 (which represented 58.6% of its revenue from operations for such year) from Rs 30,318 Million for the year ended March 31, 2019 (which represented 59.7% of its revenue from operations for such year). This is primarily as a result of increase in salaries, including overseas staff expenses, to Rs 31,775 Million from Rs 29,307 Million on account of annual increments and increase in the headcount from 15,140 as at March 31, 2019 to 16,883 as at March 31, 2020.
--Employee benefit expenses earlier consisted of Travel Cost of Billable Employees which in FY 20 are regrouped under Other Operating Expense and FY 19 figures are regrouped accordingly.
--**Finance costs   **
++Employee benefit expenses earlier consisted of Travel Cost of Billable Employees which in FY 20 are regrouped under Other Operating Expense and FY 19 figures are regrouped accordingly.
++
++Other Income
++
++
++The company's Other Income primarily consists of income from foreign exchange gains investments in mutual funds, interest received, net gain on fair value of investment and miscellaneous income. In miscellaneous income, the income from sale of export licenses (obtained as a result of government incentives) increased by Rs 655 Million in FY 20 (FY20: Rs 931 Million and in FY19: Rs 276 Million) which was more than offset by the absence of the one-time income of Rs 780 Million registered in FY19 (which was towards a transaction with one of the Company’s customers), leading to decrease in its Other Income to Rs 2,091 Million for the year ended March 31, 2020 from Rs 2,228 Million for the year ended March 31, 2019.
++
++
++The Company designates foreign exchange forward contracts as hedge instruments in respect of foreign exchange risks. These hedges are accounted for as cash flow hedges. The Company uses hedging instruments that are governed by the policies of the Company which are approved by the Board of Directors, which provide written principles on the use of such financial derivatives consistent with the risk management strategy of the Company.
++
++
++Finance costs
++
++
  Finance costs comprise bank interest paid and Interest accounted towards IND AS116. Exchange losses on borrowings are also accounted for as part of finance costs.
++
  The company's finance costs increased to Rs 365 Million for the year ended March 31, 2020 (majorly on account of Interest on Lease Liability booked amounting to Rs 350 Million as a part of adoption of IND AS 116 effective 1st April 2019) from Rs 19 Million for the year ended March 31, 2019.
--**Depreciation and Amortization   **
++Depreciation and Amortization
++
++
  The company's depreciation and amortization on tangible & intangible assets increased to Rs 1,829 Million for the year ended March 31, 2020 (out of which Rs 783 Million accounted as Depreciation on ROU created as per IND AS 116) from Rs 1,042 Million for the year ended March 31, 2019.
--== Net Profit               ==
--LTTS net profit increased by 7.0% to Rs 8,224 Million for the year ended March 31, 2020 from Rs 7,684 Million for the year ended March 31, 2019.
++Net Profit
++
++our net profit increased by 7.0% to Rs 8,224 Million for the year ended March 31, 2020 from Rs 7,684 Million for the year ended March 31, 2019.
++
++
  The company's Basic EPS before extraordinary items has increased by 6.1% to Rs 78.56 per share in the year ended March 31, 2020 from Rs 74.06 per share in the year ended March 31, 2019. The diluted EPS has increased by 6.6% to Rs 77.70 per share in the year ended March 31, 2020 from Rs 72.91 per share in the year ended March 31, 2019. The increase is on account of higher profit attributable to equity shareholders
--== Key Financial Ratios               ==
--(% style="width:484px" %)
--|(% style="width:283px" %)**Ratio **|(% style="width:104px" %)**FY 20 **|(% style="width:102px" %)**FY 19**
--|(% style="width:283px" %)Days Sales Outstanding (in days) |(% style="width:104px" %)90|(% style="width:102px" %)76
--|(% style="width:283px" %)Interest Coverage Ratio |(% style="width:104px" %)1,120|(% style="width:102px" %)641
--|(% style="width:283px" %)Current Ratio |(% style="width:104px" %)2.8|(% style="width:102px" %)2.8
--|(% style="width:283px" %)Debt Equity Ratio |(% style="width:104px" %)0|(% style="width:102px" %)0
--|(% style="width:283px" %)Operating Profit Margin ~(%) |(% style="width:104px" %)16.50%|(% style="width:102px" %)16.00%
--|(% style="width:283px" %)Net Profit Margin ~(%) |(% style="width:104px" %)14.60%|(% style="width:102px" %)15.10%
--|(% style="width:283px" %)Return on Net Worth ~(%) |(% style="width:104px" %)31%|(% style="width:102px" %)35%
++Key Financial Ratios
--= Recent developments               =
--June 02, 2020; L&T Technology Services Joins SRT Alliance and Is Recognized as SRT Ready Partner{{footnote}}https://www.ltts.com/sites/default/files/news/2020-06/SRT-LTTS%20Final.pdf{{/footnote}}
++Ratio         FY 20         FY 19
++Days Sales Outstanding (in days)         90        76
++
++Interest Coverage Ratio         1,120        641
++
++Current Ratio         2.8        2.8
++
++Debt Equity Ratio         0        0
++
++Operating Profit Margin ~(%)         16.50%        16.00%
++
++Net Profit Margin ~(%)         14.60%        15.10%
++
++Return on Net Worth ~(%)         31%        35%
++
++
++Recent developments
++
++
++June 02, 2020; L&T Technology Services Joins SRT Alliance and Is Recognized as SRT Ready Partner8
++
++
++
  L&T Technology Services Limited has joined the SRT Alliance and has been recognized as an SRT Ready partner providing customers with cutting-edge cloud-based video transport technology.
++
  The SRT Alliance, founded by Haivision in April 2017, already has more than 300 members. Its mission is to overcome the challenges of low-latency live streaming by supporting the collaborative development of SRT (Secure Reliable Transport) through the SRT Open Source Project, the fastest growing open source streaming project.
++
  SRT is a free open source video transport protocol and technology stack originally developed and pioneered by Haivision that enables the delivery of high-quality and secure, low-latency video across the public internet. Some of the world’s top broadcasters and operators are already part of the industry pervasive SRT Alliance. LTTS is one of the latest additions to the alliance as an SRT solution provider.
++
  LTTS’ in-house platforms such as its next-gen digital signage solution Flyboard, combined with its expertise in SRT and cloud transmission, open up a plethora of possibilities for the industry. Some of these include reducing transmission time by up to 75% in remote area defense communications, cloud-based production workflows to reduce transmission costs from the field to broadcaster studios, live coverage of far flung events without the need of satellite links, and enhanced viewing of sporting events through multiple angles for commentators and fans alike.
--August 04, 2020; L&T Technology Services expands collaboration with Microsoft to offer eco-friendly solutions for workplace transformation{{footnote}}https://www.ltts.com/sites/default/files/news/2020-08/LTTS_IBEMS_Microsoft_PR.pdf{{/footnote}}
++August 04, 2020; L&T Technology Services expands collaboration with Microsoft to offer eco-friendly solutions for workplace transformation9
++
++
++
  L&T Technology Services Limited announced that it has expanded its collaboration with Microsoft Corporation and launched its latest and enhanced version of the state-of-the-art i-BEMSTM solution on Microsoft Azure to transform buildings into future-ready smart campuses.
++
  With growing digital transformation, there has been a clear impetus on the need for organizations to revamp their office premises to be eco-friendly, taking into consideration sustainability aspects including greenhouse gas and carbon emissions. Another important aspect for office and facility administrators today is to find balance in their buildings to ensure health, safety and wellbeing of their workforce.
++
  LTTS’ award-winning Intelligent Building Experience Management System i-BEMSTM is a system-of-systems solution that focuses on creating digital experiences and intelligent space management. The cloud-based smart buildings/campus/spaces solution helps monitor and manage building operations and optimize business metrics leveraging advanced IoT based Edge Analytics and machine learning algorithms.
++
  i-BEMS™ uses advanced energy analytics and fault diagnostics for energy savings, and netzero energy compliance. i-BEMSTM has enterprise-grade security features and can create a digital twin to test changes in a virtual build of the building.
++
  LTTS has earlier collaborated with Microsoft to develop a smart campus in Israel for a leading technology company. The two companies have also partnered to leverage Azure IoT platform for Sustainability solutions and connect with Microsoft Dynamics 365 for Field Service to enable real-time optimization, improve ROI and employee productivity for Facility Management and Operations globally. In 2018, LTTS furthered their working relationship with Microsoft by setting up a Digital Industrial Transformation Applied Innovation Centre for shared enterprise customers.
++
  The current expanded collaboration leverages Azure to enable i-BEMSTM to act as a Facility Information Broker, unifying data from all systems making the building/campus a single entity rather than a heterogeneous collection of systems focused on employee health and safety and preservation of the immediate environment.
--= References                          =
++References
++
++
++
  {{putFootnotes/}}