- 17 Oct 2022
- ICICIdirect Research
LTI expects strong growth in H2; integration with Mindtree in Q4FY23LTIM - 4602 Change: -47.85 (-1.03 %)
LTI posted revenue growth of 4.6% QoQ & 21.6% YoY in CC terms. In dollar terms, growth was 3.6% QoQ to US$601 mn. In rupee terms, revenue grew 6.9% QoQ to Rs 4,836.7 crore. EBIT margin of the company improved ~10 bps QoQ to 16.1% on account of following tailwinds a) currency benefits +120 bps, b) higher working days +20 bps mitigated by the following headwinds: a) wage hike -90 bps & b) utilisation down impact -40 bps. Vertical wise, growth was aided by BFS, insurance, manufacturing, utilities & others, which grew 5%, 4.5%, 3.9%, 14% & 9.8% QoQ in CC terms while hi-tech declined 4.7% due to client specific issue. Geography wise, North America & Europe reported strong growth of 5.2% & 6.3% QoQ, respectively. The company added 4510 net employees, including 1600 freshers, in Q2 taking it total headcount to 53,276. LTM attrition increased 50 bps QoQ to 24.3%. The company won four large deal with TCV of US$80 mn including a Fortune 500 client.
The company indicated that demand remains robust across all verticals & geographies. In BFS , the company does not have meaningful exposure to retail banking & mortgage business where macros are expected to hit more. The company also has a strong deal pipeline and continues to win large deals, which will continue the revenue growth. The company also indicated that the growth in H2 will be stronger than H1. On attrition, it maintains that demand in certain niche skills is high. Hence, attrition is expected to be elevated for two to three quarters before cooling offs. The company expects accelerated integration with Mindtree, which will likely be completed in Q4FY23.