LTM (LTM IN) – Event Update – Expand Europe presence via domain led acquisition – HOLD
Published on 23 May 2026
LTM announced to acquire Randstad’s Technology & Consulting Services business in Europe & Australia for EUR 160 mn (~USD 180 mn), implying valuation of ~0.34x CY25 revenue of EUR 469 mn (~USD 500 mn). While the acquisition valuation appears attractive, the acquired business has witnessed revenue decline at a 12.2% CAGR during CY23–25 amid macro weakness in Europe and client rationalization. Management indicated that the rationalization exercise is largely completed, with the top 25 clients in Europe contributing ~65% of revenue and the top 10 clients in Australia contributing ~80%. However, looking at the vertical dynamics, Manufacturing seems to have higher concentration mix and that too Europe dominated, scrutinizing growth profile within marquee accounts. Near-term profitability impact remains a key monitorable given the onsite-heavy delivery mix and post integration S&M fuelling, although management highlighted that the acquired entity’s onsite gross margins are superior to LTM’s onsite margins, limiting near-term earnings dilution. At this stage, we await greater clarity on client revenue trends and profitability before incorporating the acquisition into our estimates and hence maintain our FY27E/FY28E estimates along with HOLD rating and unchanged TP of INR 4,560.
