LTM Projects AI Revenue To Surpass Traditional IT Operations

Indian IT services provider LTM anticipates its artificial intelligence business will eventually generate more revenue than its legacy services arm, Chief Executive Venu Lambu told Reuters.

Lambu said this shift will happen because enterprises will rely heavily on IT vendors to roll out large language models built by developers like Anthropic and OpenAI.

This transition comes at a difficult time. Indian IT services companies face significant market pressure. The Nifty IT index has fallen over 23% so far this year.

This decline puts the index on track for its worst annual performance since 2008, barring one exception, Reuters reported. The drop stems from concerns that advanced AI systems could cannibalise the core business of traditional IT services providers.

Strategic Anthropic Partnership

LTM is positioning itself to benefit from this market shift. The company formed a partnership with Anthropic earlier this week to bring Claude to its enterprise customers.

Lambu argues this positioning creates room for IT firms to act as implementation partners. The company aims to help clients use the right AI tools at manageable costs rather than always reaching for the "priciest frontier models".

AI touches nearly every contract. LTM sees AI in almost every deal it signs in some form, though not every use case requires a top-tier AI model.

Adoption and Financials

Revenues are showing steady growth. On the financial side, LTM reported first-quarter revenue growth of 6.1% year-on-year.

The company broke out its AI-specific revenue for the first time. LTM reported roughly $150mn on an annualised quarterly basis, accounting for about 12% of total revenue, from three businesses built around AI as a core function.

This $150mn figure excludes revenue from enterprise AI work, Reuters reported. Cases where AI is layered into a client's existing tech stack are tracked separately by LTM.

For comparison, rival HCLTech disclosed advanced AI revenue of $171mn for its June quarter. This represents roughly 4.6% of its total revenue, Reuters reported.

Scaling and Governance

Adoption follows a distinct pattern. AI projects typically begin as modest, scattered pilots before scaling rapidly. Once a client sees results, the relationship tends to generate repeat, larger engagements.

Enterprise AI adoption will accelerate. Lambu told Reuters he expects this growth to pick up pace in the back half of fiscal 2027.

However, clients remain concerned about costs. Lambu flagged rising client anxiety over the expense of running AI models as providers shift toward usage-based, token pricing.

LTM's near-term focus is helping customers build governance structures. These frameworks are designed to keep operational costs in check.