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L&T Technology Misses Q3 Revenue Estimates Due to Softer Automotive Spending

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L&T Technology Services (LTTS), an Indian engineering and technology services firm, reported a smaller-than-expected revenue for the third quarter, primarily attributed to reduced spending from its automotive clients. The company posted a 9.6% year-on-year revenue increase, amounting to 26.53 billion rupees ($307.14 million) for the quarter ended December 31. However, this fell short of analysts’ expectations of 26.65 billion rupees, according to LSEG data.

Revenue and Profit Performance

The company also revised its revenue growth forecast for fiscal year 2025, raising it to near 10%, up from the earlier range of 8%-10%, following the acquisition of U.S.-based software firm Intelliswift. Despite this, its net profit fell 4.1%, totaling 3.22 billion rupees, below analysts’ estimate of 3.32 billion rupees. The decline in profit was attributed to increased sales and administrative costs.

Mobility Business Challenges

L&T Technology’s mobility business unit, which includes services to the automotive sector, posted its slowest revenue growth of 4.1% since the company began disclosing such figures in the first quarter of the fiscal year. Analysts noted that the ongoing challenges faced by automakers, including labor strikes and the shift toward electric vehicles, have had a significant impact on L&T Technology’s performance. These factors contributed to the company’s weaker-than-expected earnings.

Market Reaction and Industry Context

Despite the disappointing results, shares of L&T Technology closed 3.1% higher ahead of the earnings announcement. In a broader context, engineering, research, and design (ER&D) services, including technology support for industries like transportation and communications, make up a significant portion of India’s $254 billion technology sector. L&T Technology’s performance reflects the ongoing challenges in the automotive industry, which is grappling with the global shift toward electric vehicles and labor disruptions.

L&T Technology’s results follow a similar trend seen in peer Tata Elxsi, whose shares tumbled 7.6% last week after missing revenue estimates.

Xpeng Plans to Hire Over 6,000 Workers in 2025 Amidst Market Competition

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Chinese electric vehicle manufacturer Xpeng announced plans to hire over 6,000 workers in 2025, as CEO He Xiaopeng shared in a letter to the company’s internal stakeholders on Tuesday. He anticipates intensifying market competition in 2025, with a price war expected to start in January. In response to the growing demand and competitive pressures, Xpeng aims to expand its presence globally, having already entered 30 countries and regions. The company has set an ambitious target to increase its footprint to over 60 markets by the end of 2025, continuing its rapid growth in the electric vehicle industry.

 

BMW and Yamaha Motor Invest in U.S. Rare Earths Startup Phoenix Tailings

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BMW and Yamaha Motor have joined several other investors in backing U.S.-based rare earths processing startup Phoenix Tailings. The $43 million Series B funding round, which closed on December 20, will help Phoenix scale its operations to meet the increasing demand for rare earths outside of China. These metals, crucial for the production of magnets used in electric vehicles, electronics, and other technology, are essential to the transition to clean energy.

Rare earths are primarily refined using the solvent extraction method, which has become outdated in the U.S. due to its environmental costs. Chinese companies have dominated this process for decades, but recent actions by Beijing to limit exports have led to a global scramble for alternative sources and technologies. Phoenix Tailings claims its innovative process can produce rare earths from mined ore or recycled equipment with little to no emissions, offering a cleaner solution to the existing industry standards.

The investment round includes venture capital funds such as Envisioning Partners, MPower, and Escape Velocity, alongside BMW and Yamaha’s venture arms. Phoenix plans to use the funds to build a $13 million facility in Exeter, New Hampshire, scheduled to open by June 2025. The facility will have the capacity to produce 200 metric tons of rare earths annually.

Phoenix has already signed over $100 million in supply contracts but has not disclosed the partners. The company’s plans also include scaling its operations with larger processing plants in the U.S. if the Exeter site proves successful. With 33 employees, Phoenix aims to go public within three to five years.

The company’s approach of focusing on rare earths processing rather than mining sets it apart from competitors such as MP Materials and Lynas Rare Earths. Phoenix is also applying for U.S. government loans and grants to support its growth.