- 16 Jan 2025
- ICICI Securities
LTTS: HEALTHY PERFORMANCE DESPITE WEAK AUTO VERTICAL
News: LTTS reported revenue of US$311.9 mn, up 1.7% QoQ and 7.3% YoY in US$ terms while in CC terms revenue was up 3.1% QoQ and 8.7% YoY. In rupee terms revenue stood at ₹2,653 crore, up 3.1% QoQ and 9.5% YoY. Verticals wise grew sequentially Tech (36.4% of the mix) and Sustainability (31.2% of the mix) grew by 9.8% & 3.1% whereas Mobility (32.4% of the mix) declined 7%. Tech grew on the back of ramp ups in MedTech, hyperscalers and communication providers. Sustainability’s growth was aided by plant modernization and automation demand. Geography wise all markets (barring North America) grew sequentially, where Rest of the World (7.6% of the mix), India (23% of the mix), Europe (18% of the mix) reported growth of 6.5%, 5.6%, 0.6% respectively. North America (51.5% of the mix) declined 0.2% QoQ. EBIT margin of the company increased by 80 bps QoQ to 15.9%, after absorbing the wage hike impact and including a one time operational M&A expense. The PAT for the quarter stood at ₹322.4 crore, up 0.9% QoQ down 4.1% YoY, translating to a PAT margin of 12.2%, down 20 bps QoQ. The net headcount during the quarter decreased by 233 employees leading to total employees of 23,465 & LTM attrition was marginally up by ~10 bps QoQ at 14.4%.
Views: On the TCV front, the company won the highest ever TCV deal wins aided by 8 large deal wins across segments. The management reaffirmed their guidance for FY25 is to achieve a near 10% revenue growth in CC terms, including the contribution from Intelliswift and maintains its medium-term outlook of US$ 2 billion revenue with EBIT margin of 17-18%.
Impact: Positive