LTIMindtree reported a healthy performance for the fiscal third quarter with revenue growth in line with estimate, in the backdrop of a seasonally weak quarter due to furloughs, and EBIT margin was slightly below expectation, said brokerage firms. On January 16, LTIMindtree released its Q3 numbers with profit at Rs 1086.70 crore, posting a drop of 7.06 per cent in comparison to Rs 1169.30 crore recorded during the corresponding quarter of FY24. It posted revenue from operations at Rs 9660.90 crore, up 7.15 per cent as against Rs 9016.60 crore reported during the third quarter of previous financial year. The company EBITDA stood at Rs 1329 crore. LTIMindtree recorded historic high order inflow at $1.68 billion, up 29 per cent sequentially.
Debashis Chatterjee, Chief Executive Officer and Managing Director, said, “We closed Q3FY25 with a revenue of $1.14 billion, registering a sequential growth of 1.8% in constant currency and 1.1% in USD terms. Our differentiated AI strategy has helped us record our highest-ever order inflow of USD 1.68 billion, laying the foundation for future growth. Our ongoing investments in AI, including new partnerships and specializations, and accolades, support our efforts to continue growing as we enter CY25.”
An analysis report by Elara Capital said, “LTIMindtree’s Q3 performance was steady in the backdrop of a seasonally weak quarter due to furloughs. Deal wins came in strong at $1.68 billion in Q3. This is factoring in renewals, which typically see some bump-up in Q3 every year.”
Centrum Broking also maintained, “The company reported revenue of Rs 96.6 billion (up 2.4% QoQ and 7.1% YoY in INR terms; up 1.1% QoQ and 5.1% YoY in USD terms). The sequential growth was led by BFSI (up 3.4% QoQ) and Manufacturing (up 8.1% QoQ). But, Healthcare & Life Sciences was down by 0.2% QoQ and Technology was down by 5.8% QoQ. EBIT margin declined by 170bps QoQ to 13.8%, impacted by higher direct costs and SG&A expenses (impact of wage hike). Reported deal booking stood at $1.68 billion vs $1.3 billion in Q2FY25.”
Motilal Oswal Financial Services (MOFSL) said, “LTIMindtree’s Q3 CC growth of 1.8% was largely in line; US BFS was strong as expected, whereas manufacturing (excluding pass-through revenue as well) was healthy too. We expect retail to recover in line with the industry in the short to medium term, but productivity pass-back in a top client could lead to another quarter of weakness in the Hi-tech vertical.”
Attrition rate
LTIMindtree added 2,362 employees during the third quarter, taking the total headcount to 86,800 professionals as of December 31, 2024. The company said that the trailing 12 months attrition was 14.3 per cent. Centrum Broking said, “Attrition decreased by 20 bps QoQ to 14.3 per cent. Utilization (ex-trainees) was down 230 bps QoQ at 85.4 per cent. 23 new logos were added in Q3FY25 vs 22 in Q2FY25.”
Growth outlook
Brokerage firms and analysts expected a sustained revenue growth momentum in Q4FY25 for LTIMindtree. Centrum Broking said, “We expect a sustained revenue growth momentum in Q4FY25, supported by ramp-up of recently signed deals, AI project deployments and revival of discretionary spending in tech. The deal pipeline remains strong, driven by cost optimization and vendor consolidation deals, providing medium-term visibility. We expect Revenue/EBITDA/PAT to grow at 12.8%/15.8%/15.9% over FY24-FY27E.”
Elara Capital said, “Q4 will likely report revenue growth and margins may rise as the impact of wage hike seems behind now. LTIMindtree is seeing some green shoots in verticals such as BFSI, Hi-Tech and Retail and is confident that discretionary spends may revive in FY26. In the medium term, LTIM may benefit from deal momentum and vendor consolidation opportunities. We do not see any risk to its target of USD 10bn revenues by FY31/32.”
Furthermore, Motilal Oswal said that the company is expected to deliver double-digit growth in FY26. “Management indicated that the Hi-tech vertical’s decline of 6% would drag on to Q4. Positively, the “AI-driven” productivity gain is being generated internally and then passed on, mitigating the adverse impact on margins. While Q4 is certainly a headwind, we believe Hi-tech growth could recover in FY26.” It further added that while the margins were a key concern for LTIMindtree in the third quarter, the worst for margins may now be behind. “A meaningful recovery in FY26 is contingent on double-digit growth (which remains our base case); however, we believe utilization levels are now comfortable, and major stressors for margins are behind,” it said.