Ladies and gentlemen, good day and welcome to the Q4 FY 2025 conference call of L&T Technology Services Limited. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandesh Naik, Head of Investor Relations. Please go ahead.
Thank you, Ryan. Hello everyone. I'm Sandesh, and welcome you all to the earnings call of L&T Technology Services for the fourth quarter of FY 2025. Our financial results, investor release, and press release have been filed on the stock exchanges and are also available on our website, www.ltts.com. I hope you have had a chance to go through them. This call is for 60 minutes. We will first start with the management remarks, which would be for about 20 minutes, and then open up for Q&A.
The audio recording of this call will be available on our website approximately one hour after the call ends. With that, let me introduce you to the leadership team present on this call. We have with us Amit Chadha, CEO and MD; Abhishek Sinha, Executive Director and President; Alind Saxena, Executive Director and President; and Rajeev Gupta, CFO. We will begin with Amit providing an overview of the company performance and outlook, followed by Rajeev, who will walk you through the financial performance. I now invite Amit for his opening remarks.
Perfect. Thank you, Sandesh. Thank you all for joining us in the call and the results here today. You will bear with me with my voice today. I have a little bit of a throat infection, but I'll try and do my best. We hit three major milestones during the quarter: crossed INR 10,000 crore in annual revenue in Rupee terms. With this, the company has an annualized run rate of $1.4 billion. Registered highest-ever large-tier TCV bookings, higher than Q3 as well, which was a record for us in itself. Surpassed 1,500 patents filing till date. Coming to quarter four results and highlights, even in a tough market environment, we had a third straight quarter of sequential organic and overall growth in quarter four FY 2025. Industry-leading revenue growth in U.S. was up 10.7%, led by Tech and Sustainability segments.
Continuing from Q3, our large deal momentum recorded the highest-ever TCV bookings, including one $80 million+ deal, one $50 million+ deal, along with one $30 million+ deal, one $20 million+ deal, and three $10 million+ deals. Order inflow, as I look at it, on these large deals alone is up quarter-on-quarter more than 25%. Half of these deals were won against competition, reflecting our growing market share based on our differentiated offerings, which we had invested in during the first half of the year: AI, GenAI, and other technologies. We had anticipated better revenue growth in quarter four. However, during the quarter, the overall macroeconomic environment created unexpected headwinds for us. A few of the large deals we won saw delay in ramp-ups, and signing of some large deals got deferred to the end of the quarter.
As you are aware, we announced one deal on the 31st of March as well. Second, in order to support select strategic customers, some of our proprietary software solutions and niche engineering work, which was done or had to be done on an investment basis, we believe this will help us in strengthening our case for larger deals in the future, building bigger market share, wallet share, as well as growing these accounts further. There are some of these soft agreements we have based on this. Lastly, the EBIT was 13.2% for the quarter. Three aspects here. This had the impact of Intelliswift integration during quarter four, as we had shared in the previous earnings call, the higher growth in SWC revenue, and finally, additional costs on supporting customers and related investments that I just talked about earlier. We continue to focus on levers to manage our operations effectively.
Now for the full year FY 2025. In FY 2025, we delivered a growth of 8.9% in constant currency. As per analyst reports, India Inc has been growing at 6%, so we are broadly happy that your company has grown higher than industry. Sustainability grew 5.7%. Mobility grew 9.3% despite a challenging year, while tech, including Intelliswift, grew 11.3% in CC terms USD. Europe led the charge, recording the strongest growth of above 21% for us. All other Geos showed positive growth. Large deals. In FY 2025, we closed a total of 32 deals greater than $10 million. One of them $80 million, three $50 million, five $30 million, two $50 million range, and 10 in the $15 million-$25 million range. All in all, fairly satisfied with what we've been able to close. I do expect this deal momentum to continue. Technology.
We are proud that we surpassed 1,500 patents filing in FY 2025 cumulatively, including 573 filed for LTTS and 929 on behalf of our customers. Of these, 190 patents are in the AI and GenAI domain alone, reflecting our focus on advanced technology. With an average of 50 patents added each quarter, our total filing for FY 2025 now stands at 206. NVIDIA invited and partnered with LTTS across three areas: Rail, MedTech, and Smart Spaces.
At NVIDIA GTC, LTTS showcased Track Ei, an AI-powered railway inspection track tool using NVIDIA Jetson for real-time defect detection and predictive maintenance. Track Ei also won the ACR the Rail Innovation Award this quarter. In MedTech, the focus is on diagnostic imaging and surgical equipment. In smart spaces, LTTS leveraged its advanced AI fusion platform to set up an integrated command and control center on Maha Kumbh, which enhances the experience of over 660 million pilgrims.
M&A. We have successfully integrated Intelliswift, allowing us to build a strong portfolio on hyperscalers to address adjacent and address adjacent markets in service-led verticals like Retail, FinTech, and Healthcare. As I go forward into the following quarters, I will start reporting progress, first of solutions and then of deals in Retail, FinTech, and Healthcare to you as well. Let me provide you segmental performance and outlook now. Mobility segment showed resilience with revenues flat in this quarter to previous, like we had guided you in the last quarter. A year ago, we showcased iDrive, our framework for SUVs. We also launched hyper-personalization and AI for driver experience, all of which resonated with our clients and seniors. Such investments are paying off for us, not just auto and T&OH as well. We continue to focus on winning large deals in technology areas like SDV, hybrid in AI.
Recently, we won a notable EUR 50 million deal, which we announced on 31st March with a European OEM on SDV and expect more such deals in the coming quarters from U.S. and Europe. We believe that overall Mobility segment will stay muted in the immediate term and will witness a turnaround toward the end of Q2. Coming to Sustainability, Sustainability did well. We had 2% quarter-on-quarter growth in revenues. Higher growth was tapered due to an unexpected delay in ramp-up of deals signed, but are now all set to grow in the coming year, including April. Companies are realigning the supply chain with a clear focus on leveraging advanced engineering solutions. This includes initiatives like predictive maintenance, real-time asset performance management, and leveraging sensor-driven analytics and industrial AI, all underpinned by LTTS strengths in plant engineering and industrial products.
This we believe will help us in growing the Sustainability segment faster in FY 2026 as compared to FY 2025. In plant engineering, we continue to see strong demand in O&G and CPG, led by CapEx projects, plant modernization, digital twins. Key clients to ramp up with us is a large deal in O&G. We were chosen by a European oil field supplier as a preferred engineering supplier to support green energy initiatives. We also expanded our engagement with an O&G major for engineering and enterprise asset management. CPG continues to spend, and we have created differentiated solutions in that space. We see strong demand for greenfield and brownfield projects in plant modernization, digitization, and safety. In February, we introduced Refinery Next, a solution aimed at transforming traditional refineries into sustainable, intelligent, and highly efficient operations.
Refinery Next integrates advanced AI-driven tools for predictive maintenance, intelligent asset management, and demand forecasting, along with energy optimization and net carbon compliance. Moving on to industrial, we are seeing larger deals being inked and a robust pipeline of deals going ahead because of our differentiated offerings in industrial machinery, building technology, electrical power, and controls. The focus areas will be energy and automation, semiconductor machinery, data centers, and motion and robotics. Nearly half the large deals TCV signed in this quarter are in the industrial product subsegment, which is one of our most profitable subsegments. This quarter, we signed our largest deal in industrial products to date, $80 million+ digital engineering transformation deal with a manufacturer of industrial products and solutions. We marked a decade of engineering excellence with Siemens to drive innovation with the creation of integrated digital twins for products and plants.
Overall, for the Sustainability segment, we see an increased large deal pipeline and expect the growth momentum to be better than Q4, with both industrial and plant subsegment firing at the same time. Finally, moving on to Tech. Tech showed the strongest growth, 28% quarter- on- quarter in revenues, led by Smart World, organic software and platform subsegment. Additionally, there was an upside of integration of Intelliswift revenues in the quarter. Excluding Intelliswift, Tech still had the highest growth amongst all the segments. The software and platforms did well, with growth in both hyperscalers and key service industry accounts in Healthcare, FinTech, and Retail. We are starting to gain traction with at least about, I would say, about 45 senior-level meetings done across the Intelliswift portfolio in the last quarter alone. The feedback and response has been extremely positive and encouraging.
The communication media and consumer tech sectors are experiencing significant transformation driven by advancements in AI and emotive technologies. In the MedTech subsegment, demand is being driven by QARA, digital manufacturing, and Sustainability engineering. Overall, we expect MedTech software platforms to do well along with Intelliswift in the coming years. Now, let me discuss outlook for FY 2026. The ongoing reasoning of tariff-based supply chain dynamics presents significant opportunities for LTTS to drive growth and deliver enhanced value of its clients. With AI adoption accelerating in the software-defined everything and the digital domain, both our core strengths of LTTS and some of these regional offerings that we had done in H1 and capabilities will serve as a key differentiator in securing large, high-impact deals.
With Q3 and Q4 having consecutively seen the highest large deal TCV win so far, we are encouraged by the large deal TCV pipeline that we have built so far. We continue to see market share gain across our top accounts. We have multiple $100 million deals, EUR 50 million deals running in advanced stages of negotiation and hope to take them to conclusion in the coming quarters. I will confirm that quarter one looks to be like a quarter four in terms of deal wins as well at this stage. At the same time, we have to bear in mind the uncertain market environment and tightening demand conditions, which is causing disruption in the shorter term, but will be beneficial for the ER&D industry over the medium to long term.
To conclude, we believe our go-deeper-to-scale strategy with our diversified portfolio of three segments: Mobility, Sustainability, and Tech gives us a balanced approach to the market and not limited to one segment. This gives us a confidence of overall growth even in turbulent times. We expect FY 2026 to be a better year than FY 2025. I'm confirming double-digit revenue growth in USD constant currency terms for FY 2026. I would also like to reaffirm our medium-term outlook of $2 billion of revenue. With that, let me thank you for all your support, encouragement through the year. I now hand over to Rajeev from the house. Thank you.
Thank you, Amit. Greetings to all of you. Let me start by saying that we had many positives in quarter four of FY 2025 and for the year FY 2025. Quarter four FY 2025 saw record highest-ever deal wins, as mentioned by Amit. FY 2025 revenue crossed INR 10,000 crore milestone. Our metrics in terms of DSO and free cash flows for FY 2025 continue to improve. Finally, acquisition of Intelliswift and integration during quarter four FY 2025, which, of course, is in line with our strategy to build capabilities in software and platforms capability for hyperscalers. With that, I will take you through the financial details of quarter four and for the year FY 2025.
Beginning with quarter four FY 2025 financials, our revenue for the quarter was INR 2,982 crore, a growth of 12.4% on sequential basis. Our year-on-year growth for the quarter came in at 17.5%. EBIT margins for quarter four came in at 13.2%.
Let me walk you through the EBIT movement in this quarter. First, consolidation of Intelliswift financials had an impact of roughly 150 basis points on the EBIT margins. We had called this out in our quarter three commentary as well. Macro-related headwinds in the quarter impacted anticipated revenues, leading to impact on EBIT margins, especially in higher margin segments such as Sustainability and Mobility. We did absorb costs to support select strategic customers during these tough market conditions. We firmly believe this will further strengthen our partnership with the customers. Moving to FY 2025 financials, our revenue was INR 10,670 crore, a growth of 10.6% over FY 2024. We saw balanced growth across our diversified segments. EBIT margins for the year came in at 14.9%. Let me explain the EBIT evolution for FY 2025.
We did make investments during H1 of FY 2025 to augment our solutions and capabilities for new-age technologies and also strengthen leadership across our new segments: Mobility, Sustainability, and Tech. This indeed helped us to win record large deals in H2 FY 2025. As Amit mentioned, we continue to see stronger pipeline and lot more $50 million+ deals that we pursue. Second, the acquisition of Intelliswift had an impact on EBIT margins. Finally, macro-related headwinds in quarter four had an unexpected impact on FY 2025 margins.
Moving to below EBIT, other income for the quarter came in at INR 33 crore, resulting from consolidation of facilities, leading to benefits on ROU. Effective tax rate for quarter four FY 2025 was 27.4% and for FY 2025 at 27.4% as well. This is within our expectation of 27.5%. Net income for the quarter stood at INR 311 crore, which is 10.4% of revenue. For FY 2025, net income came in at INR 1,267 crore, which is at 11.9% of revenue. Moving to balance sheet, let me now highlight some of the key line items.
Our quarter four combined DSO, including unbilled, continued to improve and came in at 106 days compared to 112 days in quarter three, an improvement of six days. Q4 unbilled came in at 18 days, similar levels as quarter three. We have improved upon this metric compared to our target range of 110-115 days. Talking about cash flows, in FY 2025, free cash flows came in at INR 1,379 crore versus INR 1,251 crore in FY 2024, an all-time high in absolute terms and a healthy 109% of net income. Our cash and investments improved to INR 2,976 crore end of FY 2025 versus INR 2,883 crore end of FY 2024. This is after paying for Intelliswift acquisition.
On capital return, the board today recommended a final dividend of INR 38 per share, taking the total dividend for FY 2025 to INR 55 per share, translating to a dividend payout of 46% for FY 2025. Our return on equity stands at 22% for FY 2025. Moving to revenue metrics, on a sequential basis, our dollar revenue growth was 10.7% in reported terms, mainly driven by 27.9% sequential growth in Tech segment. Talking about segmental margin performance for quarter four FY 2025, Mobility segment margins remained flat in line with revenue growth. Sustainability margins declined majorly due to absorption of costs to support select strategic customers. Tech segment margins have been impacted primarily due to Intelliswift consolidation, cyclical growth of SWC business, and lower than anticipated revenues due to ongoing headwinds.
Moving to operational metrics for the quarter, the offshore mix came in at 55.8% compared to lower compared to quarter three due to Intelliswift consolidation. We aspire to improve this ratio to 60% levels in the medium term. The fixed price revenue mix was 39.9% in quarter four FY 2025. Client profile, which is active number of clients, went up by 43% due to Intelliswift acquisition. The categories of INR 20 million and INR 1 million+ accounts have shown an improvement in quarter four FY 2025.
Client contribution to revenue in quarter four FY 2025 continues to be in similar range as compared to quarter three of FY 2025. We expect revenue from top customers to improve going forward as our targeted client mining programs come to fruition. Headcount improved sequentially by 793 to 24,258 as of year-end. This is mainly on account of consolidation with Intelliswift. Attrition remained range-bound at 14.3% levels.
Realized rupee for quarter four was around 86.41 to the dollar, a depreciation of 1.6% versus quarter three. Before I conclude, let me provide visibility on margin trajectory going forward. With the ongoing headwinds from tariffs and macro-related uncertainties, we remain cautiously optimistic for the next few quarters, though we are quite bullish in terms of our deal wins. Amit already talked about record deal wins in Q4. Q3 also, we saw very healthy deal wins. Q1 also, we are expecting to see similar levels of healthy deal wins. We will continue to pivot on revenue growth to gain market share while leveraging on operational efficiency for margin improvement and reiterate our aspiration of improving EBIT margins to mid 16% levels between quarter four FY 2027 and quarter one FY 2028. I thank all of you for your support and your cooperation. With that, I hand over to the moderator for Q&A.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Yogesh Aggarwal from HSBC. Please go ahead.
Hi guys. Just a couple of questions. Firstly, a few clarifications. Sorry if I missed. In the quarter, you added $33 million incremental revenues. How much was from Intelliswift?
What's your second question? We'll answer it together.
Okay. The second, Amit, is that for the—I mean, it's related to it, the margin impact itself, because it looks like the 150 basis point was if the full quarter integration was there. Just clarifying on that. The other thing is on the organic growth—sorry, for the guidance for next year, double-digit. Does that include Intelliswift as well? Because that would mean that 7%-8% growth would come from there itself. Yeah. So that's the question.
Yogesh, this is Rajeev here. Let me take the first question, and I'll request—I'll take the first two questions, and I'll request Amit to take the question on guidance. Your question was the increase. How much of that really is coming from Intelliswift, right? We did clarify in our quarter three commentary that Intelliswift is an annualized business of $100 million. Of course, we continue to work towards growing that business. Hopefully that answers the question. We are not splitting the revenues between LTTS and Intelliswift. We report that as consolidated.
The full quarter came in fourth quarter?
Yes, you are seeing the full quarter include Intelliswift barring a few days. Technically, the conclusion of the transaction happened on January 3rd.
January 3rd. Okay. Okay.
We played out the full quarter, if you may say. Second, in terms of margin dilution, yes, I did call it out in the quarter three commentary as well. We saw roughly about 150 basis points of margin dilution on account of Intelliswift consolidation. Having said that, we are working actively on the integration plan and expect to see synergies, both in terms of revenue and cost playout in the next following quarters.
In terms of growth, yes, we've called out double-digit. We do still believe that with the storm coming or the storm ongoing, the world has stopped giving guidance and saying where they will go. It seems to be missing. Having said that, with the.