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- 27 Nov 2024
- ICICI Securities
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LTI MINDTREE: AI DRIVEN LONG TERM GROWTH AMBITION
News: LTI Mindtree's Investor Day, themed "Elevating Outcomes," emphasised strategic initiatives in their AI led offerings along with their concentrated efforts to dominate the BFSI, Technology and Media verticals which has the potential of doubling its growth over the next 6-7 years. And the manufacturing, resources, healthcare and consumer business which can accelerate upto a 3x growth over the same period alongwith company’s plans for strategic acquisitions moving forward. The company has also launched various projects such as Minecraft 2.0 wherein their focus is to maximise growth from top 100 accounts. Under project Everest, the company managed to close 45+ large deals in the last 18 months, and under project NEO the company opened 150+ new logos in the past 18 months and 20 new logos with GenAI opportunities.
Views: The company highlighted its ambition to achieve $10 billion in revenue from the current $4.3 billion by FY2031/2, implying double digit growth CAGR. The company aspires to deliver this growth basis multiple factors such as the industry reporting a double digit growth and its AI strategy i:e AI in Everything," "Everything for AI," and "AI for Everyone". On the margins front the management reiterated its aspirations of achieving the margin band of 15-18% in the medium term on the back of initiatives like Project North Star, which focuses on revenue maximization, cost efficiency, and productivity. On the TCV front, the company has reported large deal TCV of US$ 2 bn + in the last 18 months, and the large deal pipeline accounts for US$ 5bn+ of which transformation deals account for 23% which are largely driven by its S4HANA deal mix. Despite near-term challenges in discretionary spending, LTIMindtree remains optimistic about capturing AI-driven opportunities, driving efficiencies, and scaling its business for long-term sustainable growth.
Impact: Neutral