Why IT services firms don’t offer full-year guidance but set lofty revenue goals
Subscribe to enjoy similar stories. Information technology services companies including LTIMindtree Ltd, Coforge Ltd, Sonata Software Ltd, and Happiest Minds Technologies Ltd do not traditionally provide full-year revenue guidance, but that has not stopped them from setting aspirational revenue goals. Analysts say such targets are aimed at investors.
LTIMindtree on Tuesday outlined one such aspiration in its interaction with analysts and investors: to more than double its revenue to $10-billion in next eight years through March 2032. However, investors remain unenthused. LTIMindtree shares closed 1.05% lower two days after the announcement was made, ending Thursday at ₹6,158 a piece.
The BSE Sensex dropped 1.2% in during this period, end Thursday at 79,044 points. India’s sixth largest information technology (IT) services provider ended March 2024 with $4.3 billion in yearly revenue, up 4.4% from the previous fiscal. LTIMindtree is not the only one to outline such goals.
Three other mid-cap IT services companies have also done so. Such revenue aspirations come amid uncertainty caused by generative artificial intelligence (Gen AI). And while most IT services companies have not laid out a roadmap on their Gen AI strategies, that has not stopped them from setting lofty goals.
In an interview with Mint in May this year, Coforge chief executive Sudhir Singh said, “A combined growth of $4 billion in revenue should be possible for Coforge in the next four fiscals. Eventually, growing beyond $6 billion in annual revenue is our goal." Noida-headquartered Coforge reported $1.12 billion in revenue for the year ended March 2024, up 11.7% from the year ago. In an investor presentation in the same month, Bengaluru-based Sonata
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