How L&T missed growth targets for IT units set five years ago
The group’s IT twins, LTI Mindtree Ltd and L&T Technology Services (LTTS), together look set to fall short of the targets stated by the parent company five years ago.
The group’s IT businesses in 2021 ₹25,463 crore revenue accounts for around 19% of L&T’s consolidated revenue ₹135,979 crore. L&T’s ambitious five-year roadmap called Lakshya 2026 predicts that its IT business will grow and ₹73,980 crore or around 27% of L&T’s revenue as of end-March 2026.
However, total IT business revenue in the first nine months of the current fiscal year ₹39,419 crore, accounting for nearly one-fifth of L&T’s ₹2,03,112 crore revenue.
With a quarter to go, parent L&T’s consolidated revenue may exceed stated target ₹274,000 crore, but the IT sector’s revenue seems unlikely to hit the target. Assuming the two IT businesses grow 10% in the current financial year, ₹53,546 crore, at least a quarter less than the target set five years ago.
Emails sent to LTIMindtree and L&T Technology Services and parent L&T, The country’s largest engineering and construction company, Requests for comment Sunday and Wednesday went unanswered.
external winds
According to three analysts, there are both external and company-specific factors behind the poor performance of IT businesses compared to rivals and parent L&T’s engineering and construction businesses.
First, the macroeconomic slowdown resulting from global uncertainty and the rise of artificial intelligence have left many IT firms will dial back their growth targets. Then, US President Donald Trump’s imposition of tariffs set off a protectionist wave that led many Fortune 500 companies to restrict IT spending.
Big Five, including Tata Consultancy Services Ltd, Infosys Ltd HCL Technologies Ltd, Wipro Ltd and Tech Mahindra Ltd are expected to report moderate growth in the year ending March 2026, the third consecutive year of soft growth. They are not expected to report growth of more than 4.5% in constant currency terms for the full year. Fixed currency does not take into account currency fluctuations.
“In the wake of the Covid outbreak, non-essential (discretionary) IT spending has come down drastically, so the two companies have not grown as fast as imagined,” said Abhishek Pathak, principal analyst, IT services and internet, Motilal Oswal Financial Services.
Amit Chandra, vice president of HDFC Securities, said L&T’s 2026 targets were set assuming an IT boom post-pandemic. “However, income deflation as a result of the rise of automation and low demand for IT services due to tariff wars between countries caused industry growth to fall from double digits to low single digits, hurting both companies.”
The leadership layer is angry
The construction-to-software division also faced internal challenges.
“The merger of LTI and Mindtree took longer than expected and there was a cultural mismatch. In addition, post-merger exits, unclear sales incentives for executives, and a lack of sales rigor by the merged entity hindered growth,” said Chandra.
In May 2022, L&T decided to merge Larsen & Toubro Infotech (LTI), which reported revenues of $2.1 billion in FY21, and Mindtree Ltd, which reported revenues of $1.41 billion in that year.
This merger led to a loss of leadership: First, LTI CEO Sanjay Jalona left following the appointment of Debashis Chatterjee as CEO of the merged LTIMindtree in November 2022. Three years later, Chatterjee left in June 2025 before the completion of his tenure at the company making Venugopal Lambu the new CEO.
This led to the departure of other senior leaders from Mindtree and L&T Infotech, which led to a slowdown in growth. Mindtree and LTI had reported growth of 31% and 26% respectively in the year ended March 2022. Merger LTIMindtree’s growth slowed to 17.2% in FY23, followed by growth of 4.4% and 4.8% in FY24 and FY25, respectively.
Incomplete automotive growth
LTTS had its own challenges.
Motilal Oswal’s Pathak said, “For LTTS, the company missed the automotive ER&D wave, whereas similar companies including KPIT and Tata Elxsi benefited from it. They were not able to generate much revenue from auto expenses, which is one of the key reasons for not being able to grow faster.” he said.
Of course, the company does not disclose the revenue it receives from automobile manufacturers one by one, but collects it under the mobility segment; That’s a third, or $414 million, and is its second-largest vertical after technology companies.
LTTS’s mobility business has grown 47% over the past three years, while KPIT Technologies’ revenue from automakers has more than doubled to $666 million. Of course, KPIT gets 96% of its business from providing software services to automakers. Similarly, Tata Elxsi’s revenue from the transportation sector more than doubled to $213 million during this period.
For now, growth in L&T’s combined IT business has slowed compared to its smaller peers. From March 2021 to December 2025, the combined IT business (including LTIMindtree and LTTS) posted a compound quarterly growth rate (CQGR) of 3.74%. In comparison, smaller rivals Coforge Ltd and Persistent Systems Ltd reported a CQGR of 6.52% and 6.64% respectively.
