LTIMindtree’s Q1 net profit up 4% to Rs 1,152 crore, misses Street estimates

economictimes.indiatimes.com:

LTIMindtree, which now features in India’s top 50 stocks gauge after HDFC’s merger into the lender it spawned, Monday missed forecasts to report a 4% June-quarter profit growth in what the company described as a “challenging macroeconomic environment”, potentially denting the prospects of double-digit revenue growth in FY24. Net profit for the three months ended June was Rs 1,152.3 crore, compared with Rs 1,105 crore a year ago. Revenue came in at Rs 8,702.1 crore, up 13.8% year on year, which also missed estimates.

The company created from the merger of erstwhile Larsen and Toubro Infotech and Mindtree started operating as a merged entity in December 2022. The profit was estimated at Rs 1,190 crore by an ET poll, while revenue was forecast at Rs 8,730 crore. India’s sixth largest IT firm said clients were delaying order decisions and deploying curbs on hiring despite a “robust” deal pipeline.

“The first assumption was that we saw some delay (in decision making) but we were hoping that all those delays would be over in Q1 and from Q2 onwards we should be normal business. (It) obviously did not happen,” said Debashis Chatterjee, chief executive, LTIMindtree. Sequentially, profit was up 3.4% while revenue climbed 0.1%.

The Mumbai-based firm’s employee costs were up nearly 19% on year to 5,598.7 crore led by onsite costs. The Bengaluru-based executive said the delays were broad based across industries and geographies. “We saw in Q1, there were some hiring freezes in specific within BFS (banking and financial services.) We expected those hiring freezes to go away by end of Q1, but that did not happen,” Chatterjee said.Also read | Will 2023 be a lost year for IT?Stretched Targets Now The double-digit growth in terms of