Result Analysis: LTIMindtree Limited (CMP: Rs.5133.95) Result Update: Q1FY24

LTIMindtree is a global technology consulting and digital solutions company that enables enterprises across industries to reimagine business models, accelerate innovation, and maximize growth by harnessing digital technologies. As a digital transformation partner to more than 700 clients, LTIMindtree brings extensive domain and technology expertise to help drive superior competitive differentiation, customer experiences, and business outcomes in a converging world. Powered by 82,000+ talented and entrepreneurial professionals across more than 30 countries.

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    Stock Details
    Market Cap. (Cr.) 151907.38
    Equity (Cr.) 29.59
    Face Value 1
    52 Wk. high/low 5425 / 3990
    BSE Code 532281
    Book Value (Rs) 560.76
    Sector IT – Software
    Key Ratios
    Debt-equity: 0.02
    ROCE (%): 34.87
    ROE (%): 28.56
    EPS TTM: 148.99
    P/BV: 9.15
    P/E TTM: 34.46


    Result Highlights:

    • The company reported a marginal increase in revenue of 0.1% QoQ to Rs.8,702cr. and a 3.4% QoQ growth in net profit to Rs.1,152 cr. The primary factors contributing to this performance was delay in deal ramp-ups in BFSI & retail.

    • EBIT Margin of the company increased by 30 bps QoQ in the quarter and stands at 16.7%, led by improvement in Utilization (+70bps), higher marketing spend (-20bps), and offset by visa costs (-20bps).

    • Among segments, BFSI de grew by 1.3% QoQ in $ terms, hitech & media grew 3.2% QoQ, manufacturing contracted by 1.1% QoQ, retail & CPG de grew 1.3% QoQ, health and lifesciences vertical grew 4.1% QoQ.

    • Across geographies, America grew 1.7% QoQ, Europe and RoW declined by 0.9% and 7.8% QoQ respectively. European customers are assessing business deals, budget and IT spends, while there is no concern in RoW.

    • TCV for the first quarter was $1.41 billion, which is up 4.4% from $1.35 billion in Q4, and TTM TCV was $5.1 billion, which is up 4% QoQ. Deal success is widespread in all markets & industries. The company added 19 new clients compared to 31 new clients added in Q4FY23.

    • In Q1, The headcount was 82.7K, a net decrease of 1800 personnel QoQ. Compared to Q4FY23, LTM Attrition decreased to 17.8% QoQ from 20.2%. Utilisation increased by 310 bps QoQ to 84.8% (excluding trainees). To reach 85.2%, the offshore effort mix grew by 10 bps QoQ.

    • LTIM launched Canvas.AI, a platform that uses generative AI to accelerate the concept to value process for organizations. The management is confident in its market positioning and working to find superior technological solutions to the problems.

    • Wage hikes to take place in July 23 as scheduled.



    Financial Performance:

    LTIMindtree- Financial-Performance

    Shareholding Pattern:

    Particulars (In %) Q4FY23 Q1FY22
    Promoters Group 68.68 74.03
    FIIs 10.65 9.76
    DIIs 11.67 8.10
    Public 8.62 7.79
    Others 0.38 0.32

    Management Commentary:Commenting on the June quarter results, Debashis Chatterjee, CEO and MD said, “During the first quarter of FY24, LTIMindtree delivered 8.2% YoY revenue growth in Constant Currency. Our key verticals BFSI, Manufacturing & Resources and Hi-Tech, Media, and Entertainment which make up 75% of our revenues performed well. Our strategic programs are bearing fruit and is evident in the upward movement across our client buckets. The order inflow continued to increase and reached USD 1.41 billion in this quarter. Our operational rigor helped us achieve an EBIT of 16.7% and PAT of 13.2%.”



    LTIMindtree (LTIM) reported mixed financial performance for the quarter. LTIM’s financial performance suffered as a result of the BFSI clients’ employment freeze, ramp-up delays and impact due to seasonal pass-through in Q4. Management is still unsure about the double-digit increase that was emphasized in the previous quarter, but they still want to accomplish it. Due to macroeconomic uncertainty, the customer has remained cautious about spending and has pushed back or postponed transaction start dates, which has an adverse effect on the company’s growth. However, LTIM can have industry-leading growth rates as a consequence of its deep subject expertise, strong collaborations with hyperscalers, and robust sales engine.


    Particulars (In Rs. Cr.) Q1FY24 Q4FY23 Q1FY23 QoQ%      YoY%
    Revenue from Operations 8,702 8,691 7,644 0.1% 13.8%
    Other Income 132 66 178 98.2% -25.9%
    Total Income 8,834 8,757 7,822 0.9% 12.9%
    Employee Benefit Expenses 5,599 5,581 4,708 0.3% 18.9%
    Employee benefit Expenses as % of Sales 64.3% 64.2% 61.6% 10 bps 270 bps
    Sub-contracting expenses 641 670 674 -4.4% -4.9%
    Depreciation & Amortisation Expense 185 182 166 1.3% 11.0%
    Other Expenses 827 836 769 -1.1% 7.5%
    EBIT 1,451 1,421 1,327 2.1% 9.3%
    EBIT Margin 16.7% 16.4% 17.4% 30 bps -70 bps
    Profit After Tax (PAT) 1,152 1,114 1,107 3.4% 4.1%
    PATM (%) 13.2% 12.8% 14.5% 40 bps -130 bps
    EPS (in Rs.) 38.92 37.65 37.43 3.4% 4.0%
    Segment Revenue (In Rs. Cr.) Q1FY24 Revenue % Q4FY23 QoQ% Q1FY23ss YoY%
    Banking, Financial Services & Insurance 3,260 37.5% 3,299 -1.18% 2,750 18.57%
    Hi-Tech, Media & Entertainment 2,061 23.7% 1,999 3.12% 1,948 5.81%
    Manufacturing & Resources 1,506 17.3% 1,523 -1.14% 1,243 21.12%
    Retail, CPG, Travel, Transport & Hospitality 1,318 15.1% 1,335 -1.24% 1,199 9.97%
    Health, Life Sciences & Public Services 557 6.4% 535 4.02% 505 10.30%
    Total 8,702 100.0% 8,691 0.13% 7,644 13.84%
    Geography Revenue % Q1FY24 Q4FY23 Q1FY23 USD Growth (%)
    QoQ YoY
    North America 71.7% 71.9% 73.1% 1.7% 10.2%
    Europe 15.3% 15.4% 15.2% -0.9% 7.3%
    Rest of the World 13.0% 12.7% 11.7% -7.8% -2.6%
    Source: Company website, EWL Research

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