LTIMindtree, the sixth-largest IT services firm, reported a sequential rise of less than 1% in its net profit to `1,162 crore for the second quarter, mainly due to a muted revenue growth and the impact of wage hikes carried out during the quarter.
The bottomline, however, managed to come ahead of Bloomberg estimate of Rs 1,142 crore. Despite macroeconomic uncertainties weighing on the sector, revenue from operations rose 2.3% sequentially to `8,905 crore, surpassing estimates of Rs 8,894 crore.
The September quarter included the impact of the annual wage hike cycle, dragging down the company’s Ebit margin by 70 basis points to 16%. However, the company remains optimistic about ending the financial year with an Ebit margin of 17-18%.
“Although we anticipate above-average furloughs in Q3, we are confident that our robust order inflow and a healthy deal pipeline will help us deliver a stronger H2FY24, setting a promising stage for FY25,” said Debashis Chatterjee, CEO and MD.
As client spending continues to remain cautious, the company reported order inflows of $1.3 billion in Q2, slightly lower than the $1.41 billion in Q1, but up 20% on a year-on-year basis.
Revenue from the company’s largest market, North America, which accounts for 73% of its sales, grew 6% y-o-y, while Europe grew 10.2% compared to the same period, Chatterjee said on the earnings call. Its largest vertical — banking, financial services and insurance — reported a marginal decline in sales, on a sequential basis, while sales from the other verticals rose.
The company added 794 employees, taking the total headcount to 83,532 as of September 30. In Q1, its headcount had declined on a sequential basis.
Attrition improved to 15.2% in the second quarter, compared to 17.8% in the preceding quarter. Utilizsation also improved to 86.8% in the September quarter from 84.8% in the preceding quarter.