LTIMindtree reported a 3.2% sequential increase in revenue and 10.3% increase in net profit for the quarter ended September 2024, driven by broad-based growth, and large deals. Net profit was positively impacted by an increase in forex gains and other income and slight sequential reduction in finance cost, even though the company’s provision for tax increased q-o-q. The company added 2,500 employees to its headcount during the quarter.
“We consolidated our standing in an existing account through vendor consolidation and long-term revenue commitment, securing a $200 million+ TCV over a 5-year period. Our large deal pipeline remains robust, with several deals nearing final decisions,” Debashis Chatterjee, MD& CEO, LTIMindtree said during the firm’s earnings call.
The Mumbai-based firm’s revenue came in at Rs 9, 432.9 crore, largely in line with Street estimates (Rs 9, 431 crore), while net profit at Rs 1, 251.6 crore was slightly ahead of analyst estimates of Rs 1, 226 crore.
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The firm gave a “cautiously optimistic” outlook for the remaining half of the fiscal. “We hope to maintain the momentum of the first half barring the seasonal headwinds in Q3 and (prevalent) uncertainties (in the business environment),” the company management said.
Earnings before interest, taxation, depreciation and amortisaton (Ebitda) for the quarter was Rs 1,699.3 crore and Ebitda margin was 18%. PAT margin came in at 13.3%.
LTIMindtree shares were up 0.67% at the end of the day’s trading. The results were announced after market hours.
Verticals and geographies
India’s sixth-largest information technology company’s revenue from its largest vertical, the banking, financial services & insurance, saw a 4% sequential increase in the September quarter. Meanwhile, technology, media and communications and manufacturing and resources rose 1.9% and 0.7%, respectively, from the previous quarter.
“Banks’ focus on cost-cutting through restructuring, along with our strong relationship and execution track record, have benefited us in gaining market share. We have a robust large deal pipeline in this vertical,” LTIMindtree management said.
Chatterjee elaborated that in some cases where clients consolidated vendors, LTIMindtree was chosen as the partner, helping the firm ramp up its market share in the segment.
“We are seeing more BFSI clients working towards getting data ready for AI,” he added. He however cautioned, “It would not be fair to say that discretionary spending by clients is back. That (trend) remains unchanged for now.”
Sales from technology, consumer Business and healthcare, life sciences, and public services increased by 2.6% and 5.9%, respectively. In terms of geographies, North America continued to account for 75% of LTIMindtree’s revenue.
The market grew 2.6% on-quarter and 7% annually. The revenue from Europe rose 2.2% sequentially and dipped 1.9% on-year. Sales from the rest of the world saw a rise of 4.4% compared to the preceding quarter, though annually dipped 1.1%
AI Pivot
The company also outlined its AI strategy during the earnings call. “To lead in this new AI-influenced business environment, we did a complete LTIMindtree-level pivot to an AI-first approach, which continues to drive our success amidst these disruptive times,” Chatterjee said.
The strategy, he explained, is based on three core principles – AI in Everything (ensuring we reimagining everything the company with AI), Everything for AI (creating a supportive ecosystem for AI innovation to scale within the enterprise), and AI for Everyone (democratizing AI for the benefit of all stakeholders).
Employee Metrics
LTIMindtree’s total headcount rose by 2504 to reach 84, 438 in the September quarter as compared to 81,934 in the June quarter. The company’s attrition rate rose marginally quarter-on-quarter at 14.5% (Q1: 14.4%), while the utilisation reduced to 87.7% from 88.3% in Q1. The firm hired 1100 freshers during Q2.
“We have been operating at higher utilisation past few quarters to benefit from the merger and utilise the bench strength of both merging entities. Going forward, we would like to bring the utilisation levels back to around 85% so there will be (further) headcount addition as we go forward,” the management said on the call.
Apart from this, LTIMindtree called out the wage hike impact on margins in Q3 at 200 basis points.
From: financialexpress
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