Shares of LTIMindtree Ltd have plunged 25 per cent in 2024 so far, thanks to clients' elongated decision-making cycles and delays in deal ramp-ups. With its Q4 results today, all eyes would be on the management commentary on progress on the client mining strategy, its views on larger contracts and EBIT margins and performance of E&U and manufacturing verticals.
Nirmal Bang expects LITMindtre to report 13.8 per cent YoY rise in profit at Rs 1,267 crore on 4.9 per cent YoY rise in sales at Rs 9,116 crore. Ebitda margin is seen at 16.2 per cent.
"We are expecting 1 per cent CC revenue growth sequentially. We expect cross-currency tailwinds of 30 bps. We expect EBIT margin to expand by 80 bps to 16.2 per cent in 4QFY24. Tailwinds include improved utilisation, operational efficiencies, and improved SG&A spending. The TCV number for Q3FY24 was $1.5 billion after $1.3 billion in Q2FY24 and $1.4 billion in 1QFY24. We expect a similar number for Q4FY24," Nirmal Bang said.
Axis Securities sees LTIMindtree to log 6.8 per cent YoY rise in profit at Rs 1,190 crore on 5.3 per cent YoY rise in sales at Rs 9,155 crore. It sees Ebit margin at 15.7 per cent. Vertical commentary on the BFSI, Manufacturing, and Retail should be key things to watch out for, it said.
Sharekhan said LTIMindtree may report sequential revenue decline of 0.6 per cent in CC terms, due to lower pass through revenue. EBIT margins are likely to decline by 40 bps QoQ, owing to gradual reversal of furloughs, it said, as it expects profit to grow 3.8 per cent YoY at Rs 1,114 crore. This brokerage sees sales at Rs 8,955 crore, up 3 per cent.
Nirmal Bang said LTIMindtree did indicate that it is getting some advantage from vendor consolidation and the order book has many of these deals.
"It also indicated that cross-sell and up-sell strategies are working. Client mining is another area that we will closely watch. We would like to hear about some concrete numbers around its Aramco JV which it recently signed," it said. LTIMindtree will be hosting a conference call later today where the LTIMindtree management will discuss the performance of the quarter and answer participants’ questions during the call.