‘We have good balance between efficiency dollars and business dollars’ | The Financial Express

‘We have good balance between efficiency dollars and business dollars’

L&T Infotech Q2 profit rises 23% y-o-y to Rs 680 cr

‘We have good balance between efficiency dollars and business dollars’
The Q4 would also be strong, even if there is a change in spend pattern, and LTI expects the second half (H2) of the fiscal to be stronger than H1.

Larsen and Toubro Infotech (LTI), a subsidiary of construction major Larsen & Toubro (L&T), expects the second half of this fiscal to be much stronger than the first, even as the fear of a global recession looms large.

“There is a natural apprehension about the macro environment and as inflation and interest rates continue to go up, a reduction in consumer spending is expected. Clients are spending money on whatever helps business revenues and these business dollars are secured, while they are looking to make savings only on IT spends, what we call efficiency dollar,” Sudhir Chaturvedi, president sales and executive board member at LTI, said.

“We have a good balance between efficiency dollars and business dollars, and that’s what we are focusing on,” he told FE in an interaction.

LTI is expecting the third quarter (Q3) of this financial year to be much stronger than Q2 as it “continues” with business and hiring plans. The Q4 would also be strong, even if there is a change in spend pattern, and LTI expects the second half (H2) of the fiscal to be stronger than H1.

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On its part, LTI will focus on helping clients become a lot more efficient in the new technologies as a lot of investments are in made in technology, especially in digital data and cloud.

For the second quarter ended September, the global technology consulting and digital solutions company posted a net profit of Rs 679.8 crore, a 7.2% rise from Rs 634.4 crore posted during the sequential quarter ended June 30. On a year-on-year basis, the net profit rose 23.2% from Rs 551.7 crore posted in September quarter.

Its revenue rose 6.9% to Rs 4,836.7 crore from Rs 4,522.8 crore posted in June quarter, and was up 28.4% from Rs 3,767 crore posted in the previous year-ago quarter. “We had broad-based growth across regions, across verticals and across deal sizes. For this quarter, we also won four large deals,” he added.

LTI’s attrition in Q2 rose to 24.3% (last 12-month basis) from 23.8% in June quarter and 19.6% recorded in September quarter. The company added 2,215 personnel in Q2, taking its total headcount 50,981, and the firm intends to add a similar number in Q3.

The reporting quarter witnessed peak of attrition as employees left for higher studies, but it is cooling down. “We still don’t know whether it’s a trend.”

On the issue of moonlighting, Chaturvedi said LTI had also come across certain instances, which he termed as “miniscule”. “It’s a very small issue, and it’s not something that we’re focused on. Our focus is on growing the business and doing exciting projects, even as our contracts don’t permit dual employment,” he added.

On the merger with Mindtree, the process is in the final stages and is expected to be completed by December quarter.

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First published on: 16-10-2022 at 03:15 IST