LTIMindtree eyes a bounceback in Q1, bets on broad-based growth for FY25
IT firm LTIMindtree after recording a sequential profit decline in Q4, is confident of bouncing back in Q1 FY25, and aims to drive broad-based growth and improve margin performance, said Nachiket Deshpande, COO, LTIMindtree.
The company had absence of pass throughs, extended furloughs and slower large deal ramp-ups impacting revenue growth in Q4. However, it notes that large deal ramp-up delays were largely a Q3 and Q4 phenomenon, and the recent deals closed have ramped up fully. “For FY25, we are seeing a growth prospect across all verticals. Even in FY24, all our vertical segments grew and we expect a similar performance in FY25 as well. The deals that we’ve announced in the last two quarters are in the BFSI vertical, as we
Nachiket Deshpande, COO, LTI Mindtree
see the revenue realisation come into Q1, we’ll see growth returning for BFSI as well,” Deshpande told businessline.
CAUTION PERSISTS
The demand environment, Deshpande notes, is similar to FY24, as caution continues and spending priority changes with more focus on cost takeout and consolidation deals, which is reflected in the deal pipeline. However, the uncertainty that existed last year is no more as prevalent as clients have recalibrated spends. This has resulted in elimination of delay in decision making, even as caution persists.
Margins for Q4 came in at 14.7 per cent, lower than 15.4 per cent in Q3. The focus for the company remains on achieving profitable growth while striking a balance between growth and margin. The margin improvement programme, initiated during the merger, is progressing well, as seen in our utilisation levels. Realising synergies, particularly in real estate, takes time, but it’s on track. “Major reason for the margin dip is the growth not playing out as anticipated. As growth starts to come back, that will be reflected in our margin performance. Our medium to long term plan on where we want to be on margin remains the same,” Deshpande said.
Even as the company has not set out any specific hiring target, it notes that the future growth will reflect in the hiring pattern as well.