LTIMindtree Q1 steady; analysts see signs of revival under new leadership

Business Standard

18-07-2025

Brokerages on LTIMindtree: LTIMindtree reported a stable set of numbers for the first quarter of FY26, with a Y-o-Y net profit rise of 10.6 per cent to ₹1,254.6 crore and revenue up 7.6 per cent at ₹9,840.6 crore. On a sequential basis, profit grew 11.2 per cent, while revenue inched up 0.7 per cent.
While the company's top line marginally missed Bloomberg estimates of ₹9,855.4 crore, the bottom line outperformed expectations pegged at ₹1,194 crore.
Brokerages viewed the results as largely in-line, with positive commentary on margin expansion, deal wins, and a visible shift in momentum under the new leadership of CEO and MD Venu Lambu.
"We had a promising start to the year delivering broad-based growth, expanding margins, and making significant progress on our strategic priorities," Lambu said, attributing the gains to initiatives like the Fit4Future programme, sales transformation, and focus on AI. "While the macroeconomic environment remains challenging, I'm confident that our disciplined execution and unwavering client focus will continue to drive our performance," he added.
In dollar terms, revenue stood at $1,153.3 million, reflecting a growth of 2 per cent Q-o-Q and 5.2 per cent Y-o-Y. Constant currency (CC) growth was 0.8 per cent Q-o-Q. Ebit margin expanded by 50 basis points to 14.3 per cent, despite seasonal visa costs and forex headwinds, aided by 100bps cost savings from Fit4Future - a programme aimed at improving operational efficiency.
Brokerage views
Analysts at Emkay Global called the operating performance 'mostly in-line', noting that growth was broad-based across verticals including Consumer, Healthcare, Life Sciences, Public Services, and BFSI.
The brokerage highlighted the resilience in deal momentum, with total contract value (TCV) of $1.6 billion, marking the third consecutive quarter of over $1.5 billion in order inflows. The book-to-bill ratio stood at about 1.4x.
Emkay sees continued demand for cost-saving initiatives, vendor consolidation, and tech modernisation amid macro uncertainties. It marginally tweaked FY26–28E EPS estimates by 0-1 per cent and maintained an 'Add' rating with a target price of ₹5,400, valuing the company at 26x FY27E EPS.
Nuvama Institutional Equities echoed a similar tone, describing the results as 'decent' and in-line with its expectations. Ebit margin improvement and consistent deal wins reflected operational discipline. TCV rose 1.9 per cent Q-o-Q and 16.4 per cent Y-o-Y to $1.63 billion.
The brokerage noted that LTIM has faced multiple headwinds in recent years – both macro and micro – but sees early signs of a turnaround under Lambu's leadership.
"The company now appears to be turning the corner under the new CEO... targeting industry-leading growth and improved margins," it said in its note.
Thus, Nuvama has upgraded its valuation multiple to 30x FY27E PE (from 25x), and maintained a 'Buy' rating with a revised target price of ₹6,200 (earlier ₹5,200).
Client, people metrics
The company had 741 active clients as of June 30, 2025. Notably, the number of $1 million+ clients grew by 14 Y-o-Y to 404, while $5 million+, $10 million+, and $50 million+ clients rose by 11, 3, and 2, respectively.
On the people front, LTIMindtree had 83,889 professionals, with trailing 12-month attrition at 14.4 per cent. Utilisation excluding trainees stood at 88.1 per cent.
With margin tailwinds from efficiency programmes, strong order book, and optimism around demand recovery, analysts believe LTIMindtree is gradually regaining investor confidence, particularly under the focused leadership of Venu Lambu.