Growth in the telecom and semiconductor segment will be subdued due to macro-economic challenges and client ramp down, said Keshab Panda, CEO, L&T Technology Services.
In a conversation with Moneycontrol he said, “In telecom and hi-tech, we had a customer issue and we communicated the impact of it to the market. The impact was seen in the first quarter and will continue in the next quarter as well.”
“From the third quarter (October-December) we will return to our original speed,” he said.
Of the five key verticals of LTTS, growth in telecom and hi-tech declined 15 percent sequentially to Rs 300 crore and 9.7 percent year-on-year. The company’s overall revenue from operations stood at Rs 1,347.5 crore. Telecom accounts for about 22 percent of total revenue for the firm.
The other four verticals are transportation, plant engineering, industrial products and medical devices.
Earlier, Chief Financial Officer Parameswaran Ramakrishnan had explained that the client ramp down impacted almost 4 percent of revenue.
The impact of this ramp down was close to $28 million annually. It is likely to continue until September 2019, post which the company will witness buoyancy.
Apart from this, the ongoing US-China trade war is likely to affect the semiconductor business.
Panda added, “I don’t think this [the subdued market] will last forever since in the semiconductor and chip design, there are very few companies that can design chips. We are very well positioned to cater to this market.”