Management Comments
The overall performance was consistent with our expectations. Growth was very strong - in excess of 20% year-on-year in three of our verticals - Plant engineering, Medical devices, and Transportation. Digital and leading-edge technology, the growth driver for ER&D, contributed to 41% of Q3 revenue and grew 29% year-on-year. Operationally, we executed well. We held EBIT and Net Profit margin almost steady from the previous quarter. Our deal win traction continues - we closed nine deal wins across sectors which includes two deals each with a TCV of USD 30 million plus.
Let me provide a brief summary of our performance in each of the verticals before providing the overall outlook. Starting with Transportation, we had a good quarter and the pipeline continues to be exciting. We continue to see multiple large deals in our strength areas of electric cars, autonomous driving, and avionics that can help us sustain a strong growth trajectory. In Telecom and Hi-tech while the performance in Q3 was softer than what we expected, we believe that worst is behind us and Quarter-4 onwards we will see growth in this segment. We see deals that play to our advantage especially in the areas like VLSI chip design, new-age media, and hi-tech, and we expect the pace of growth to gradually increase as we win them. In Plant Engineering, where we have a strong competitive advantage in domain knowledge, our solid performance has been on the back of continuously expanding the scope of deals and winning large engineering values-center deals. We are partnering our customers in newer areas like digital transformation, cyber security, and plant automation. In Medical, we continue to see strong growth prospects. Regulation, digitization, and new product development are all driving growth. Industrial Product as communicated last quarter, there was a bit of a slowdown in spending at some of the large accounts due to budget constraints.
The smaller accounts have been ramping up very well and we are seeing good opportunities in areas like IOT, smart building consultancy, and so on. I am happy to share with you, Microsoft has acknowledged LTTS as their innovation partner in developing low-carbon solutions. We have an ongoing engagement with them to develop sustainable smart buildings and campuses. Talking about Products and Solutions, we are working on creating a new structure based on the recommendations we received. We see a lot of potential in scaling up i-BEMS and Engineering connected platforms and we will share with you more details as this takes better shape. We are also working on a couple of path-breaking solutions, for example, in the medical domain how to diagnose chest x-ray images using AI technology and increase speed and accuracy of diagnosis. Another challenge we are trying to solve in the agriculture domain using AI, machine learning, imaging, and robotic for weed removal and crop health management. Let me now discuss the outlook: we are on track to meet our revenue guidance of 10% in USD for FY ’20.
While it is premature to talk about FY ’21, we are optimistic on growth as the market opportunities and deal sizes we see are significant and our competitive positioning has only got stronger. Growth continues to be our focus and we are investing in competency building and broadening our presence within each of our segments. In Q3, we opened a design centre in Rockford, Illinois in US that will cater to digital engineering, avionics design, and aftermarket services for the aerospace industry. Investments like this will help us work closer with our customers and enables us to be their preferred partner in their ER&D programs and drive sustainable growth for us.
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