L&T Infotech net profit grows 34.9% y-o-y in Q1 FY17

L&T Infotech on Thursday posted a consolidated net profit of Rs 235.8 crore for the three month ended June 30, up 34.9% from a year-ago period. Total income grew 14.8% to Rs 1,593.2, compared with the corresponding period last year. Sequentially, the net profit was up 3.2%, while total income declined 0.9%.

Total income included revenues related to foreign exchange gains. Revenue from operations for the June quarter stood at Rs 1,555 crore. Revenue in constant currency terms declined 0.3% sequentially, while it grew 12.1% over the last year. "This quarter was all about execution. Despite the headwinds the industry is facing, we have seen growth in all our verticals," Sanjay Jalona, Chief Executive Officer & Managing Director told Business Standard. "Margins have been under pressure for the industry as a whole."

Among verticals, BFS and insurance led the growth, contributing 25.3% and 22.1% of total revenues, followed by energy, which contributed 11.9% of the total. While the deal pipeline remained the same as the last few quarters, Jalona said, the quality of deals was changing. Deals now have the larger component of digital as the companies look to cut down cost of operations as well as headcount.

Close to 22% of the company's projects are around digital, he said. "Newer technologies like SMAC (social, cloud, analytics, mobility) can cut down cost significantly for companies. Customers are spending money on robotics as well as automation inorder to automate repetitive, manual jobs," he said. "For the IMS segment, the deal size is reducing as they have larger component of cloud now. For the business process automation, we are seeing a good deal pipeline as we have the capability as well as the right partners. "The company bagged a deal worth $50 million from the Central Board of Direct Taxes to provide comprehensive big data, analytics and surveillance solution across India so as to expand its tax base, said Jalona. Adding: "Another analytics deal, we have got from a lead bank related to compliance and risk. Over the long term, it is more than $20 million deal."

According to him, the company is focusing on five areas of growth — digital, analytics, IIoT, cloud apps and automation. Geographically, the growth was led by the US and Europe, which contributed 69.4% and 18% of total revenues, respectively, while revenues from India declined 2.1 percentage points sequentially to 5.7% of the total this quarter. "A lot of the projects in India have infrastructure requirement built into them, which we did last quarter. So this quarter, we saw a slight decline in India revenues. But with the CBDT deal coming in, we remain positive about India market."

The total head count for the company as on June 30 stood at 19,292, while the attrition rate (LTM) was 19.5%, compared with 18.4% in the last quarter and 20.1% in a year-ago period. The company, which went to IPO earlier this month, received a strong response from investors. The company's promoter and engineering & construction major L&T sold a part of its stake through L&T Infotech IPO.