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Spotting a rare growth opportunities in North American business, LTIMindtree posted a 5.1% year-on-year (Y-o-Y) increase in its revenue at Rs 9,143 crore for the first quarter of FY25. It exceeded ET’s estimate at Rs 9,080 crore. North America revenue contribution grew to 75.1% in the first quarter of this fiscal – highest since the official merger between the erstwhile IT firms, LTI and Mindtree. On a sequential basis, revenue grew 2.8%.
Margins at the sixth largest Indian IT service firm grew by just 30 bps (100 bps is 1%) to 15% but still remains lower from a Y-o-Y perspective. In Q1 of FY24, the firm’s margins were at 16.7%. The company added that some of the operating efficiency that led margin improvement has also been offset by higher travel related costs vis-à-vis last quarter.
Bucking trend, LTIMindtree added a little above 280 employees to its headcount in the just concluded quarter. The company also said that wage cycle review for employees will be done in Q3 of this fiscal.
Largest vertical, Banking, Financial Services and Insurance grew by 2.9% Q-o-Q. Similarly, the second and third largest vertical – Technology, Media & Communications and Manufacturing & Resources also grew sequentially by 7.9% and 1.8%, respectively.
Debashis Chatterjee, chief executive officer and managing director, LTIMindtree, said, “While the environment remains unchanged, fiscal 25 started on a positive note for us.” Chatterjee attributed the growth in three verticals and North America “to a measured uptick in IT spending for critical initiatives with clients balancing innovation and fiscal prudence.”
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He added that the ramp up in deals the company spoke about in previous quarters is beginning to reflect in its revenue. “The broader macro environment has remained unchanged, and businesses continue to adopt agile strategies to cope to the economic conditions. We expect the market to follow this path for FY25 where the focus will continue to be on cost-take out, but also on select high priority transformations.”
The company is working on more than 150 engagements with clients in AI and GenAI. Chatterjee added “We are pushing the participation of LTIMindtree on projects with GenAI, and that's what we are focusing on.”
While order inflow remained stable at $1.4 billion, in terms of client metric, the firm saw a decline of one client in its category of $50 million client. Its $100 million clients remained stagnant at 2.