In the rapidly evolving landscape of technological innovation, L&T Technology Services is positioning itself at the forefront of change. With a bold vision in mind, the engineering services behemoth is setting its sights on an ambitious goal: expanding its talent pool in the realms of artificial intelligence (AI) and software-defined vehicles (SDV) by an astonishing tenfold. This strategic move comes as a response to the escalating demand from clients, who are increasingly recognizing the significance of these domains in shaping the future of various industries. In an exclusive conversation with Amit Chadha, the CEO and Managing Director of L&T Technology Services, we delve into the intricate details of this visionary endeavor.
Chadha, with an air of unwavering determination, sheds light on the multi-faceted approach that the company is adopting to achieve this audacious goal. “We are making investments in three pivotal areas,” he discloses. “Firstly, our focus on artificial intelligence is unwavering. We currently boast a dynamic team of around 200 professionals in this field, but our ambition knows no bounds. We are set to amplify this team to an astounding 2,000 individuals, a testament to our belief in the transformative power of AI.”
He then seamlessly transitions to the second pillar of their strategic expansion. “Our journey into the realm of software-defined vehicles is equally exhilarating,” Chadha continues. “Presently, we have a dedicated team of approximately 180 experts driving innovations in this arena. However, our aspirations demand more. We have set our sights on growing this team to a formidable 1,800-strong force within the coming months. This expansion will fuel our capacity to shape the future of mobility through SDVs.”
The strategic trifecta wouldn’t be complete without the inclusion of cybersecurity, a domain that has been gaining prominence as technology infiltrates every facet of our lives. Chadha maintains an air of anticipation as he discusses this facet. “Cybersecurity is paramount in today’s digital age,” he emphasizes. “While the demand landscape is evolving, we are attuned to the needs of our clients. We are closely monitoring the trajectory of this domain and are prepared to step up our game in response to the surge in demand.”
As the conversation unfolds, Chadha’s emphasis on growth becomes increasingly infectious. When prodded about the timeline for these monumental transformations, he maintains an air of calculated patience. “Our journey towards this transformation will unfold over the next 6 to 18 months,” he reveals, a spark of excitement dancing in his eyes. This considered approach is indicative of L&T Technology Services’ commitment to excellence, ensuring that every step forward is well-calibrated and geared towards creating enduring impact.
L&T Technology Services’ legacy of excellence is underpinned by a diverse global presence. Chadha provides insights into their geographical expansion plans as he delineates the strategic hotspots where talent acquisition will be concentrated. “Our AI-focused hiring efforts will predominantly transpire in India, our home base, and Poland, which is increasingly establishing itself as a technological powerhouse,” he elucidates. “On the SDV front, we are set to bolster our manpower in a multitude of locations. From Sweden’s Gothenburg to the innovation hubs of Munich in Germany, Detroit in the US, Japan, Poland, and of course, our home ground in India – these centers of excellence will become our launchpads for SDV innovation.”
Chadha’s comprehensive strategy is grounded in recognition of the multi-faceted applications of AI across the five verticals in that L&T Technology Services operates. This astute observation underscores the company’s commitment to contributing to client research and development pursuits. The remarkable USD 280 million in revenues for the June quarter tell a compelling tale, where the transportation sector commands a staggering 33% of the pie. Chadha attributes this remarkable feat to the strategic deals the company has secured in the transportation segment.
Intriguingly, while some sectors thrive, others face challenges. Chadha candidly points out the areas that are undergoing stress within the industry landscape. “Sectors like semiconductors and consumer electronics are currently facing unique challenges,” he reveals. “Their hurdles have momentarily cast a shadow, but we are resilient. We are harnessing our expertise to overcome these hurdles and navigate towards more promising horizons.”
The intricate tapestry of macroeconomic dynamics also plays a pivotal role in shaping the company’s trajectory. Chadha’s astute observations on extended deal approval processes shine a light on the evolving nature of client interactions. “The decision-making landscape is shifting,” he admits. “More client executives are now involved in these crucial determinations, elongating the decision-making timeline. We adapt and evolve, ensuring that every client’s vision is met with unwavering dedication.”
With a retrospective lens, Chadha reflects on the previous quarter’s journey. “While we experienced a modest 2.9% sequential revenue decline in Q1, amounting to Rs 2,301 crore, our conviction remains resolute,” he asserts. He exudes confidence in realizing the projected 20% revenue growth for FY24 while simultaneously working towards the formidable milestone of achieving a USD 1.5 billion annual revenue run rate by FY25. These targets might seem audacious, but Chadha’s optimism is infectious, igniting a renewed sense of purpose within the organization.
Even in the realm of profitability, Chadha’s outlook remains undaunted. Addressing the dip in operating margin from 17.9 % in the preceding March quarter to 17.2% in the June quarter, he remains steadfast in his conviction. “We are laser-focused on our goal of expanding the operating margin to over 18% by FY25,” he asserts. This drive for sustained profitability is emblematic of L&T Technology Services’ commitment to delivering consistent value to its stakeholders.
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The conversation takes a more localized turn as Chadha delves into the nuances of serving the Indian clientele. He emphasizes the need for parity in expectations when it comes to quality services. “Our Indian clients seeking world-class services need to understand the value proposition,” he asserts. “Premium services come with a corresponding price tag, and this sentiment particularly resonates with quasi-state entities. If we aspire to create global benchmarks, we must be prepared to invest in that journey.”
Chadha’s dedication to fostering Indian talent on the global stage is palpable. He unveils ambitious plans for geographical expansion, reinforcing the company’s commitment to its core principle. “We are primed to establish and expand centers in Bengaluru, Chennai, and Vadodara,” he reveals, his voice tinged with excitement. These centers of excellence will serve as conduits for nurturing local talent and equipping them to shine on the global stage.
In the dynamic sphere of technology and innovation, L&T Technology Services is etching its mark as a trailblazer. Chadha’s strategic vision, coupled with the company’s relentless commitment to excellence, is propelling them toward a future defined by AI, SDVs, and unbounded possibilities. As we conclude our conversation, it’s evident that the company’s journey is not just a business endeavor; it’s a reflection of its unwavering belief in the power of innovation to shape the world. L&T Technology Services is not just expanding its talent pool; it’s expanding the horizons of possibility. The road ahead is bold, audacious, and resolutely transformative.