DBT Bureau
Bengaluru, 18 July 2024
LTIMindtree has seen growth recovery in its largest BFSI (banking, financial services, insurance) vertical in the first quarter of FY25 and the IT major expects the momentum to continue in the second quarter as well.
In the post-earnings conference call, the management of LTIMindtree indicated that growth had resumed in many of its previously paused BFSI transformation projects, which led to growth recovery in the vertical.
BFSI is the largest vertical of the Bengaluru-headquartered company, which contributed 35.2% to its revenue in Q1FY25.
“The management indicated that growth momentum in the BFSI sector, especially in the BFS segment, will continue. They attributed this growth to the resumption of previously paused transformation projects and vendor consolidation. Key sub-segments within BFSI gaining momentum include regulatory & compliance, data & AI, and consumer experience,” Brokerage firm, Prabhudas Lilladher wrote in a report.
In Q1, the company registered a revenue of $1.1 billion, registering a 2.5% rise over the previous quarter in USD terms. The mid-tier firm’s operating margin expanded to 15% from 14.7% in the previous quarter. The order book of the firm stood at $1.4 billion during the quarter.
According to analysts, the likely growth momentum in Q2 would be supported by lateral hiring. LTI Mindtree also expects fresher intake to continue for the rest of the year. “The management also indicated that the resumption of these high-priority programmes are coming at a shorter sales cycle, which implies the S&M (sales & marketing) engine needs to be fuelled to support the corresponding topline growth,” Prabhudas Lilladher added in the note.
In the first quarter, LTIMindtree added 1,400 freshers. The total headcount of the mid-tier IT company stood at 81,934, an addition of 284 employees over the previous quarter.
However, analysts pointed out that the operating margin would continue to remain under pressure owing to impending wage hike coupled with less scope for further improvement in employee utilisation.
