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Informist, Friday, May 22, 2026

 

--LTM: Deal to help better manage co's subcontracting costs 

--CONTEXT: LTM mgmt's remarks on Randstad business purchase in investor call 

--LTM: Co won't see any material impact on EBIT margin due to Randstad deal 

--LTM: Will focus on marquee clients who spend on IT, AI 

--LTM: Sales, marketing invest will be minimal to benefit from Randstad deal 

--LTM:See initial scope of $55 mln-$60 mln revenue from GCC deal with Randstad 

 

By Shakshi Jain and Avishek Rakshit

 

NEW DELHI/KOLKATA – Information technology major LTM Ltd. does not anticipate a material impact on its earnings before interest and tax margin for 2026-27 (Apr-Mar) from the proposed acqusition of Randstad N.V.'s technology and consulting services business across Europe and Australia. The target business enjoys a better onsite gross margin compared to LTM, the management said in a conference call with investors Friday. 

 

Earlier in the day, LTM announced that it had issued an offer to acquire Randstad's technology and consulting services business in France, Germany, Belgium, Luxembourg, and Australia for an enterprise value of up to 160 million euros on a cash-free, debt-free basis, subject to customary valuation adjustments on closing. The 360 degree partnership deal also includes a five-year IT services agreement to drive artificial intelligence-enabled transformation for Randstad's India global capability centre and a strategic talent managed service provider arrangement to support LTM's expanding global workforce. The proposed purchase is expected to be completed by the December quarter.

 

"LTM has good amount of spend on our subcontractors. We believe there is an opportunity in increasing the efficiency of our spend on subcontractors...So we are going to leverage the parent company Randstad Group's MSP capabilities, managing our subcontractors and most importantly, the contract covers the savings that we realise through the subcontractors," a top company executive said.  

 

From the five-year IT services agreement tied to Randstad's India global capability centre, the company sees intitial scope of $55 million to $60 million in revenue. Overall, with this proposed deal, LTM will focus on marquee accounts even at the cost of smaller accounts if required. "In Europe, the top 25 customers contribute to 65% of the revenue (Randstad). In Australia, top 10 customers contribute to 80% of the revenue. If it was hundreds of tail accounts, it doesn't fit into our strategy. Because that's not how LTM works," the management said.

 

The IT player expects to incur minimal sales and marketing expenditure to cross-sell its offerings in the new geographies, given the talent that will come with the deal. "We are getting a lot of good talented sales people, who have a very deep brand relationship. The clients that I spoke about, they are clients with a very big team. So that means there is already a deep front end relationship that exists," the management said.

 

At 1439 IST, shares of the company traded over 2% lower at INR 4,040.40 on the National Stock Exchange.  End

 

US$1 = INR 95.86

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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