LTIMindtree Q3 results: Profit may jump over 20%; key things to watch

LTIMindtree is likely to report over 20 per cent year-on-year (YoY) rise in net profit for the December quarter on 4-6 per cent rise in sales. Margin is seen improving on yearly basis. Investors would keenly follow performance of BFSI, hi-tech and retail verticals and the impact of macro headwinds on demand. Besides, they would want to hear on the impact of wage hikes on margin and guidance for FY24 as the second half of financial year was expected to be better than the first half.

BNP Paribas said FY25 revenue outlook; performance of top accounts; commentary on client budgets; investments in GenAI partnerships and solutions; deal pipeline and updates on the merger synergies will be keenly followed.

"We expect revenue growth to moderate to 0.5 per cent QoQ (up 0.9 per cent QoQ in CC) due to lower number of working days and higher-than-expected impact of furloughs, especially in BFSI and Hi-Tech verticals, partially offset by momentum in manufacturing and energy verticals. We model a 64 bps QoQ decline in EBIT margin to 15.3 per cent due to the impact of furloughs

In the case of profitability, PhillipCapital sees LTIMindtree reporting 22.2 per cent YoY rise in profit at Rs 1,222.60 crore on 4.9 per cent YoY rise in sales at Rs 9,045.60 crore. Ebit margin is seen at 16.1 per cent up 10 basis points QoQ and 220 basis points YoY. Dollar revenue is seen at $1.086 billion, up 1 per cent QoQ and 3.7 per cent YoY.

"We expect CC revenue growth of 1.2 per cent QoQ. Growth impacted by higher furloughs in BFSI and Hitech; Manufacturing vertical is expected to remain strong. Margins expected to remain flat QOQ as furlough impact is offset by operational efficiencies. Watch out for 2024 budget commentary, demand outlook, merger synergies progress, deal ramp up visibility, BFSI spending outlook and margin outlook," it said.

Axis Securities sees LTIMindtree profit at Rs 1,245 crore, up 24.4 per cent. It sees sales at Rs 9,155 crore, up 6.2 per cent. Operating margins are likely to expand marginally by 13 basis points, it said. "Key things to watch out for are management commentary on the E&U and Manufacturing verticals," Axis Securities said.

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