 "LTIMindtree Q1 net profit up 4.1% to Rs 1,152 cr, tad below forecast")
LTIMindtree posted a net profit of Rs 1,152.3 crore for the first quarter ended June, up 4.1 per cent from a year ago and 3.4 per cent QoQ (quarter-on-quarter), slightly below consensus Bloomberg estimates of Rs 1,194 crore.
The Bengaluru-based IT services company’s revenue for the first quarter stood at Rs 8,702.1 crore, up 13.8 per cent on a YoY basis driven by broad-based growth, in line with consensus Bloomberg estimates of Rs 8,775 crore. On a sequential basis however, revenues were flat as cut in technology budgets in certain sectors dragged growth.
The dollar revenue stood at $1.05 billion, up 8.2 per cent in constant currency from the previous year but flat sequentially, on the back of deals worth a total contract value (TCV) of $1.41 billion during the quarter.
“Growth was driven by strong performance in major verticals in key geographies...we are seeing a growing trend in deals focussing on efficiencies...we remain confident on our value proposition,” said Debashis Chatterjee, CEO and MD, LTIMindtree.
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LTIMindtree’s EBIT margin expanded to 16.7 per cent from 16.4 per cent in the preceding quarter due to operating efficiencies and currency benefits.
With employees returning to offices and the profitability for enterprises coming under pressure due to inflation, there is now heightened level of scrutiny around technology budgets especially when it comes to discretionary projects.
In terms of verticals, Health, Life Sciences & Public Services grew 4.1 per cent QoQ followed by High-Tech, Media and Entertainment that grew 3.2 per cent QoQ in dollar terms. Banking, Financial Services & Insurance (BFSI), the largest vertical that contributes 36 per cent to LTIMindtree’s topline declined 1.3 per cent QoQ in dollar terms. Manufacturing and Retail (including Travel and Hospitality) declined 1.1 per cent and 1.3 per cent sequentially in dollar terms.
The attrition rate for the June quarter moderated to 17.8 per cent from 20.2 per cent in the preceding quarter indicating it is gradually coming down. The management said in the earnings call that the company has moved about 1,000 people from delivery to sales as part of a one-time re-classification exercise. Mindtree had a total of 82,738 employees as of 30 June.
"The falling attrition levels as noticed by most of the IT companies is a further sign of comfort going ahead. In the next few quarters, we would keenly track the operational performance of the merged entity, with expected synergies to benefit the company in the long term," said Dhruv Mudaraddi, Research Analyst, Stoxbox.
LTIMindtree declared its earnings after market hours on Monday. Ahead of its earnings, the company’s shares closed up 0.78 per cent at Rs 5,133.95 on the BSE.