When Larsen and Toubro Ltd (L&T) next outlines its five-year growth plans, the conglomerate will have enough to mull over on what went wrong with an ambitious expansion plan for its IT companies, among the top 10 tech services businesses in India today, set in 2021.
The group’s IT twins, LTI Mindtree Ltd and L&T Technology Services or LTTS, together, look set to fall short of the parent’s stated aspirations from five years ago.
In 2021, the group's IT businesses brought in ₹25,463 crore in revenues, accounting for about 19% of L&T’s consolidated topline of ₹135,979 crore. L&T’s ambitious five-year roadmap, dubbed Lakshya 2026, had then envisioned that the IT business would grow and account for ₹73,980 crore, or about 27% of L&T’s revenue by the end of March 2026.
But, in the first nine months of the current fiscal, the IT business revenue totalled ₹39,419 crore, accounting for about a fifth of L&T’s ₹2,03,112 crore revenue.
With one quarter to go, parent L&T’s consolidated revenue could cross its stated goal of ₹274,000 crore, but the IT business’s revenue looks set to miss the target. Assuming the two IT businesses grow by 10% in the current fiscal, they would end with ₹53,546 crore, at least a fourth less than the goal set five years earlier.
Emails sent to LTIMindtree and L&T Technology Services, and parent L&T, the country’s largest engineering and construction company, seeking comments on Sunday and Wednesday went unanswered.
External headwinds
Both external and company-specific factors are behind IT businesses' underperformance compared to their rivals and to the engineering and construction business of parent L&T, according to three analysts.
First, a macroeconomic slowdown due to global uncertainty and the rise of artificial intelligence has led many IT firms to dial back growth targets. Then, US President Donald Trump’s tariff imposition set off a protectionist wave that made many Fortune 500 companies hold back on their IT spending.
The Big Five, including Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies Ltd, Wipro Ltd, and Tech Mahindra Ltd, are expected to report a tepid growth in the year ended March 2026—the third straight year of soft growth. They are not expected to report growth upwards of 4.5% in constant currency terms for the full year. Constant currency does not take currency fluctuations into account.
“After the covid pandemic, non-essential (discretionary) IT spending had reduced drastically, which is why the two companies did not grow at a pace once imagined,” said Abhishek Pathak, lead analyst for IT services and internet at Motilal Oswal Financial Services.
L&T's goals for 2026 were set assuming an IT boom after the pandemic., said Amit Chandra, vice-president at HDFC Securities. "However, the rise of automation resulting in revenue deflation and low demand for IT services because of tariff wars between countries led the sector growth to drop from double digits to low single digits, which also hurt the two companies.”
Leadership layer roiled
The construction-to-software major also faced internal challenges.
“The merger (of LTI and Mindtree) took longer than expected and there was a cultural mismatch. In addition, exits following the merger, along with unclear sales incentives for executives and a lack of sales rigour of the merged entity, hampered growth,” said Chandra.
In May 2022, L&T decided to merge Larsen & Toubro Infotech (LTI), which reported $2.1 billion in revenue in FY21, and Mindtree Ltd that posted $1.41 billion revenues that year.
This merger led to leadership churn: first, LTI’s CEO Sanjay Jalona left after Debashis Chatterjee was appointed the CEO of the merged LTIMindtree in November 2022. Three years later, Chatterjee left in June 2025, before the completion of his term with the company making Venugopal Lambu the new CEO.
This, in turn, led to an exodus of other senior leaders from Mindtree and L&T Infotech, which consequently led to slow growth. Mindtree and LTI had reported a 31% and 26% growth, respectively, in the year ended March 2022. The mergerd LTIMindtree’s growth slowed to 17.2% in FY23, followed by a 4.4% and 4.8% growth in FY24 and FY25, respectively.
Missing automotive growth
LTTS had its own set of challenges.
“For LTTS, the company missed the auto ER&D wave, whereas peers, including KPIT and Tata Elxsi, capitalized on it. They could not make much revenue out of the auto spending, which is one of the key contributing reasons for not growing at a faster clip,” said Motilal Oswal's Pathak.
To be sure, the company does not individually spell out revenue from carmakers but clubs it under the mobility segment, which accounts for a third, or $414 million, and is its second-largest vertical after tech companies.
LTTS's mobility vertical grew 47% in the last three years whereas KPIT Technologies’ revenue from automakers more than doubled to $666 million. To be sure, KPIT gets 96% of its business from providing software services to car makers. Similarly, Tata Elxsi’s revenue from its transportation vertical more than doubled in this time to $213 million.
For now, the growth at L&T’s combined IT business has slowed, as compared with smaller peers. Between March 2021 and December 2025, the combined IT business (including LTIMindtree and LTTS) reported a compounded quarterly growth rate (CQGR) of 3.74%. In contrast, smaller peers Coforge Ltd and Persistent Systems Ltd reported a CQGR of 6.52% and 6.64%, respectively.