LTM (LTM IN) – Analyst Meet Update – AI led transformation underpins FY31 growth plans – HOLD

We attended LTM’s Analyst Day, the company outlined a five-year strategic roadmap centred on AI-led business transformation, with management targeting a doubling of USD rev. by FY31 (implying ~15% USD revenue CAGR) and a 200bps EBIT margins expansion. The strategy is anchored on three pillars; Invest for (1) Growth, (2) Pivot and (3) Excellence. (1) Growth is expected to be driven by capturing addressable revenue (Platform-oriented and Business-AI-led services), reimagined horizontal service lines, and scaling newer geographies. Additionally, M&A would be contributing 15-17% of incremental revenue over the next 5 years, that translates to ~13% organic CAGR (FY26-FY31). (2) The Pivot strategy focuses on Domain & Technology convergence that creates additional TAM for “Business AI and AI-led Digital Engineering solutions” (USD0.8T) while leveraging partnerships across native-AI and LLM providers ecosystems to capitalize on an expanded industry TAM of ~USD2.3T (including leakage of USD0.3T from traditional bucket). (3) Excellence pillar aims to drive AI-led productivity, outcome-based delivery models, and cost optimization to support the targeted margin expansion (+200bps over the next 5 years). Considering the leakage in the traditional bucket, weakness in the marquee accounts and maturing AI-led services, we believe LTM is at the inflection point, wherein the near-term revenue growth appears to be challenging before it achieves the aspirational growth rate. Additionally, the integration of onsite-heavy Randstad's would weigh on the near-term consolidated margins, given its low-margin profile and revenue growth weakness. We maintain our FY27E/FY28E estimates and reiterate our HOLD rating with an unchanged TP of INR4,560, based on 20x FY28E EPS.