More Stories

Informist, Thursday, Apr. 17, 2025

By Rajesh Gajra

NEW DELHI – The top line growth of LTIMindtree Ltd. will likely be flat to muted because of slow client spends, deal ramp-downs, pass-back of productivity gains from artificial intelligence efficiencies to a large hi-tech client. The impact of the subdued revenue will likely also reflect on the operating margin of the company. The bottom line performance may show a higher growth trajectory as compared to the top line, probably due to non-operating income or lower tax expenses.

The company, which is a technology consultancy and digital solutions subsidiary of engineering major Larsen and Toubro Ltd, will likely report a consolidated net profit of INR 11.55 billion for the March quarter, up 6% sequentially and 5% on year, according to an average of estimates by 20 brokerage firms. The consolidated revenue from operations is seen rising 2% on quarter and 11% on year to INR 98.49 billion.

The highest net profit estimate is INR 12.11 billion by Choice Equity Broking while the lowest estimate is INR 10.98 billion by HSBC Global Research. The revenue estimates range from a low of INR 97.07 billion by Nirmal Bang Equities to a high of INR 99.07 billion by InCred Research Services.

In constant currency terms, LTIMindtree's revenue, according to an average of estimates by 15 brokerages, will likely be $1.14 billion. The earnings before interest and tax margin will likely be 14.2% for the March quarter, according to an average of estimates by 15 brokerages, as against the reported margin of 13.8% in the previous quarter.

In the December quarter, the company's consolidated revenue from operations increased 2.4% sequentially and 7% on year to INR 96.61 billion, while the consolidated net profit was down 13% to INR 10.85 billion on a quarter-on-quarter basis and down 7% compared to the year ago quarter.

Kotak Securities' institutional equities division expects LTIMindtree's revenue to be disappointingly flat "due to weak travel and hi-tech vertical." The March quarter will also have to bear the hit of a full quarter impact from productivity sharing with a top client, the brokerage said in its preview report. Elara Securities (India) sees the company posting flat on-quarter revenue growth due to weakness in travel, insurance, and banking and financial services segments.

According to Motilal Oswal Financial Services, LTIMindtree will likely report flat revenue in constant currency terms due to slower discretionary spending and deal ramp-down, along with a decline in hi-tech vertical's revenue on account of productivity pass-back in a key account spilling into the March quarter. The management of LTIMindtree had in the post-December quarter earnings call with investors in January said that the productivity benefits passed on to a large hi-tech client was in play for two months in the December quarter and which would extend into the March quarter.

Brokerage Prabhudas Lilladher also expects the company to report muted growth of 0.3% on quarter of revenue in constant currency terms "due to the slowdown in ramp-up of certain deals" and the productivity pass-back to a large client. The brokerage sees the earnings before interest and tax margin improving "by just 10 bps (basis points)" on the back of "full absorption of wage hike implemented" in the December quarter and which will continue in the June quarter as well.

"Weak revenues will filter through to weak margins," Kotak said in its preview report. IDBI Capital Market Services, on the other hand, expects the margin to improve by 63 basis points sequentially "on operational efficiency."

The company will detail its March quarter earnings on Wednesday. Post-announcement of the results, the investors and analysts will be scanning for management updates on order book and large deals trend, outlook on banking and financial services segment and discretionary spend revival, according to IDBI Capital. According to Kotak, "further focus will be (on) senior leadership attrition in the organization."

In respect of guidance for 2025-26 (Apr-Mar), brokerage Motilal Oswal believes the initial commentary from the management on FY26 growth will be muted, "though margin guidance should be maintained or even increased, as most major margin headwinds appear to be behind." On Thursday, shares of LTIMindtree ended 2% down at INR 4,191.90 on the National Stock Exchange.

Following are the Jan-Mar consolidated earnings estimates for LTIMindtree based on reports from 20 brokerage firms in descending order of estimate of net profit:

End

US$1 = INR 85.36

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.