LTM had promised a growth uptick from the September quarter (Q2FY27), but the 1.1% sequential constant currency (CC) revenue improvement was unsatisfactory. The drag came from seasonality in the technology and services vertical and its Saudi Arabian joint ventures, which reduced sequential growth by 60-70 basis points (bps).
The company has strategically shifted the deal mix towards shorter-tenure artificial intelligence (AI) projects as it aspires for a better H2FY27. H2 is poised to be buoyed by AI-led deals, recovery in client accounts and the Randstad Technology and Consulting Services acquisition (approvals on track for Q3FY27).
AI deals have six-12 months duration and enable faster revenue conversion than traditional large IT deals with long transition periods. The former are also gross-margin accretive.
LTM eyes CC year-on-year growth of 5.3% in FY27—similar to FY26. But order inflow fell 25% sequentially and 21% year-on-year in Q2 to a multi-quarter low of $1.26 billion, clouding near-term revenue visibility.
LTM attributed this drop to a change in mix. AI revenue grew 40% year-on-year to 13.4% of Q2 revenue. A significant portion of the orders comprised annual contract value (ACV)-based deals.