LTIMindtree Q1 Preview: Healthy sequential growth likely on uptick in BFSI, manufacturing

In constant currency terms, analysts estimate revenue growth to be 2%.

Meanwhile, net profit for the April-June 2024 period may increase marginally up to 2% year-on-year. The sequential PAT growth is likely to be around 5%.

ETMarkets.com

In the preceding March quarter, net profit fell 1% year-on-year to Rs 1,100 crore. Revenue from operations in the January-March period rose 2% year-on-year to Rs 8,893 crore.

Key things to watch out for in the earnings card include commentary around demand, performance of BFSI and manufacturing verticals.

Here's what analysts expect from LTIMindtree's Q1:

Nomura

We expect revenue growth of 2.0% quarter-on-quarter in cc terms. This will be partly aided by onstart of paused projects in BFS vertical (as seen in 4Q FY24). We expect EBIT margin to expand by 50 bps quarter-on-quarter. Key things to watch out for - commentary on cost takeout projects, banking vertical and outlook on client discretionary spend.

Kotak Equities

We expect quarter-on-quarter CC revenue growth of 2%, driven by healthy uptick in top client, BFS and manufacturing verticals. We expect modest margin expansion with bench build-up, investments in sales, deal transition costs and visa costs consuming most of incremental profitability . We expected deal TCV in the $1.5-1.7 bn range due to seasonality in bookings at top clients, led by renewals.

Management has highlighted green shoots in demand. Factors underpinning this confidence will be a key focus area. We expect investors to focus on: (1) overall demand commentary and indications on recovery in discretionary spending, (2) synergy deals and participation in large cost takeout and transformation deals, (3) elevated senior management attrition in recent quarters and (4) strategy to return to top-quartile growth and profitability aspirations.

Motilal Oswal

LTIM should report 0.7% CC growth in 1Q, dragged by weak demand environment and soft discretionary spending. Manufacturing is expected to perform along similar lines, whereas BFSI should see tailwinds from the low-base effect.

Margin is likely to see a sequential pickup of 90 bp quarter-on-quarter due to reversion of a one-off impact and better operating leverage. In 1QFY25, demand commentary will be closely monitored coupled with the BFSI vertical’s performance.

Axis Securities

We expect LTIMindtree to report strong revenue growth of 2.1% quarter-on-quarter in rupee terms. Operating margins are likely to contract marginally by 34bps. Key things to watch out for are management commentary on the E&U and Manufacturing verticals.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)