LTIMindtree Profit Shows Sluggish Growth

The company—formed after the recent merger of L&T Infotech and Mindtree—however, reported a 20% growth in its banking, financial services and insurance (BFSI) vertical, leading to a 23% rise in rupee revenue at ₹8,362.5 crore.

The growth in BFSI comes at a time when LTIMindtree’s larger peers such as Tata Consultancy Services, Infosys and Wipro reported a slowdown in overall client spending, particularly led by the BFSI vertical in the fiscal fourth quarter.

To be sure, Infosys trimmed its FY24 revenue growth guidance to 4-7% after March quarter revenue came in at a six-year low. TCS, too, has sounded the bugle of caution for the future roadmap when it comes to revenue growth.

On the operational front, LTIMindtree’s earnings before interest and taxes (Ebit) grew 12% in the March quarter to ₹1,373.4 crore from ₹1,229.1 crore a year earlier. Margin, however, fell 170 basis points to 16.4% in the quarter.

Additionally, the company reported a 19.9% rise in constant currency revenue for FY23, aided by deals worth $4.8 billion during the year.

“We are pleased to report a strong FY23 with a broad-based full-year revenue growth of 19.9% in constant currency," said Debashis Chatterjee, managing director and chief executive, LTIMindtree.

“This performance positions us well to deliver profitable growth in FY24. Our order inflow for the quarter came in at $1.35 billion, helping us close the full-year order inflow at $4.87 billion. We added 31 new clients for Q4 and increased our count of $50 million plus customers by 2 to 13. Our full-year operating margin was at 16.2% and the basic EPS was at ₹149.1."

He added that “client requirements have changed over the last quarter, and we are now meeting the new requirements to deliver cost savings which are being directed to fund in flight transformation programs."

The 12-month trailing attrition came in at 20.2%, in-line with the industry trend this quarter.

To be sure, all larger IT companies have reported attrition rates in the range of 20-24% this quarter except Tech Mahindra and Wipro.

Segmentally, while BFSI led y-o-y growth for LTIMindtree during Q4FY23, it was followed by growth in manufacturing (12.4%), retail travel transportation (9.5%) and healthcare and lifesciences (6.8%).

North America continues to be the biggest contributor to overall revenue, with nearly 72% of the company’s revenue coming from here, followed by Europe and rest of the world.

The company also announced a dividend of ₹40 per equity share.

LTIMindtree’s stock ended Thursday’s session with gains of 3.9% at ₹4,320.30 apiece on the BSE against a 0.6% gain on the BSE IT index.