IT services firm LTIMindtree reported lower-than-expected revenue and net profit for the March quarter, as clients continued to tighten spending on large-scale IT projects due to escalating geopolitical tensions and macroeconomic uncertainties.
The company is not alone in missing the analysts’ estimates, its larger peers — Tata Consultancy Services (TCS), Infosys, HCLTech, and Wipro — also missed meeting the Street expectations on the revenue front.
The Mumbai-based company, however, reported a sequential growth in both topline and bottomline. The revenue rose 1.1% sequentially to Rs 9,771.7 crore in January-March, but fell short of analysts’ estimation of Rs 9,868 crore as pegged by Bloomberg.
Meanwhile, the company’s operating margin, also known as the earnings before income and tax (EBIT) margin, was flat quarter-on-quarter at 13.8%, and the net profit rose by 3.9% sequentially to Rs 1,128.6 crore, falling short of analysts’ expectation of Rs 1,165 crore.
“We concluded FY25 with a revenue growth of 5% in constant currency terms and an EBIT margin of 14.5%. Our key verticals and a major geography drove our yearly growth despite an ongoing challenging macro environment. The robust order inflow, driven by a significant array of AI-led deal wins, illustrates the pervasive integration of AI across our service offerings,” Debashis Chatterjee, chief executive officer and managing director, said.
On the deal front, LTIMindtree order inflow came in at $1.60 billion in the March quarter, which was a tad lower than $1.68 billion reported in December quarter.
The IT company’s revenue contribution from its largest vertical, the financial services, rose 12% year-on-year in constant currency (CC) during the quarter ended March.
Further, sales contribution from the technology, media and communications segment rose 2.1%. Meanwhile, revenue from manufacturing and resources rose 13.3% from the year-ago period. Meanwhile, revenue from consumer business and healthcare, life sciences and public services fell 2% and 16.2%.
On the geography front, the company’s revenue contribution from North America rose 6.8% year-on-year in CC to 74.5%. Meanwhile, the revenue from Europe fell 1.5% to 13.6%, and that of the rest of the world rose 8.5% and 11.9% in CC on a year-on-year basis.
The company’s total employees count fell 2,493 quarter-on-quarter to 84,307 and the attrition rose 10 basis points to 14.4%. The utilisation also rose 40 bps sequentially to 85.8%.