Latest news with #Lambu
Time of India
21-07-2025
- Business
- Time of India
AI-assisted coding is the way to go when hiring graduates: LTIMindtree CEO
Academy Empower your mind, elevate your skills Hiring for freshers or entry-level graduates will have artificial intelligence or AI-assisted coding as part of the improvised assessment as the correlation between revenue and headcount growth becomes more de-linear, said chief executive officer (CEO) of the sixth-largest Indian IT company, LTIMindtree 'We are very optimistic about continuing our effort in inducting freshers. We added 1,600 freshers this quarter and we are going to add more throughout this year as well. AI-assisted coding is the way to go about it,' said Venugopal Lambu Lambu said there was more emphasis in terms of the learning ability, and the foundational skill sets that freshers have on which companies can build, using their training and learning methods.'So those assessments will always improvise it…Whenever we hire people, we take all those aspects, whether it is related to the coding roles, cloud roles or infrastructure roles or data roles,' he on freshers by building a pyramid-style organisation structure has been key for the over-$283-billion outsourcing industry's services delivery model. However, over the past more than a year, since AI took centre-stage entry-level jobs and hiring at technology firms was impacted with companies coding 20-25% via AI, reducing the need for junior-level human AI technology permeates across functions and solutions, Lambu believes there is a correlation or a non-linearity in the revenue growth and workforce addition.'Over the last few quarters, when we added revenue, the headcount has not necessarily increased. So, there is a correlation or a non-linearity, but it is too early to call out to what extent it will happen,' he added. LTIMindtree , formed with the merger of L&T Infotech and Mindtree in November 2022, last week reported a 5.2% year-on-year growth in the first quarter revenue of fiscal year 2026 at $1.15 billion. It was a 1.97% sequential rise boosted by healthy growth from Europe and its consumer or retail transitioned to take over the Mumbai-headquartered Larsen & Toubro (L&T) subsidiary's top seat on May 31, after induction into the firm in company announced its largest deal with a US-based client worth $450 million in the first quarter.'We are on the verge of signing a couple of deals, and one of them will actually beat our own record. That gives me the confidence that we will move towards the double-digit growth at some time in the second half of the year,' Lambu IT industry has been struggling with low single-digit to flat business growth over the past two years after more than two decades of strong double-digit revenue growth tariff-led macro uncertainties and the AI-backed efficiencies increase cost pressures, most software service providers are witnessing a demand contraction from top clients. This is lowering revenue contribution from large deals, a key vector for IT firms' growth.'Our contribution of top clients' revenue decreased because it has moved to the other categories. For example, we added two new $50 million-plus accounts on-year basis…The portfolio mix also is changing as we start building larger deals,' Lambu we are betting big on AI, Lambu said, AI will be net positive for both revenue and margin growth, which it expects to be closer to 16% in the next couple of quarters from 14.3% in the June quarter.
Mint
21-07-2025
- Business
- Mint
World's top companies are realizing AI benefits. That's changing the way they engage Indian IT firms
Global corporations embracing artificial intelligence are reshaping their outsourcing deals with Indian software giants, moving away from traditional fixed-price contracts. The shift reflects AI's disruptive influence on India's $280 billion IT services industry, as focus shifts away from human labour and towards faster project completion. Fortune 500 clients waking up to AI's gains from fewer people and faster work are considering so-called time and material contracts which are based on actual time and labour spent—At least, before committing to the traditional fixed-price pacts. A time and material (T&M) contract is an agreement where a client pays a service provider based on the actual hours worked by their team and the cost of materials or resources used, rather than a fixed upfront price for the entire project. 'There are some (contracts) where we do based on the outcome. There are some customers that expect that this is better to do it on T&M (time and material)," said K. Krithivasan, managing director and chief executive of TCS, during the company's post-earnings conference call with analysts on 10 July. As agentic AI evolved, clients also want to see how they are able to benefit from the results," Krithivasan said. 'So, they want to do it on T&M. And then after a period of time, move towards the fixed-price model. So, we are seeing both options here." The change reflects the disruption that AI is causing for India's $280-billion information technology services industry. And it comes when clients are still cautious about discretionary spending amid global uncertainty and AI risks. LTIMindtree, too, saw similar changes in its contracts with clients. 'I saw a positive response when the discussion was about converting some of the time and material contracts to managed services and output-based construct," said Venu Lambu, managing director and chief executive officer of LTIMindtree, in an interview with Mint on 18 July. According to Lambu, this was driven by an AI-led solution provided by the company. 'Our clients are excited about it; so they want to hear more from us, and they want to see how we can help them to transition from the time and material contract to a more outcome or managed services-based construct, and we see that as a big opportunity," said Lambu. Both TCS and LTIMindree had a mixed first quarter of FY26. TCS ended with $7.42 billion in revenue in the three months through June, down 0.59% sequentially, whereas LTI Mindtree reported a revenue of $1.15 billion, up 1.97% on a quarterly basis. The revenue breakup of Wipro Ltd, India's fourth-largest IT services firm, over the last two years also shows how IT sector contracts are changing. Wipro's share of fixed price contracts reduced to 52% of overall revenue at the end of the three months through June from 56% at the end of the April-June 2023. During the same time, its share of time and materials contracts increased to 48% from 43%. 'Clients agree to this as it shifts the risk to the IT service providers for cost overruns and scope creep, and forces the service providers to generate the productivity that AI promises," said Peter Bendor-Samuel, founder of Everest Group. As of now, IT service providers get paid in a staggered manner rather than a lump-sum amount at the end of the year. Such instances of deferring payments arise due to macroeconomic uncertainties, which might compel companies to service their payment obligations to their IT vendors at a later date. According to Phil Fersht, chief executive of HFS Research, the change in ways through which companies engage with IT firms is brought about as clients seek lower prices from IT outsourcers. 'Enterprise customers are demanding lower prices from their service partners, which is shifting the focus away from the provision of people-based effort to the provision of the actual work," said Fersht. AI is also prompting companies worldwide to use fewer people in operations as automation is replacing manual, redundant labour. For IT outsourcers, this poses a challenge as they are traditionally billed on the basis of the number of employees deployed for the client. 'Net-net, if customers demand a 20% price-cut, the only way the likes of TCS and LTIMindtree can deliver on those savings, while maintaining their own profit margins, is with the smart use of AI to provide the same services with fewer people," said Fersht. 'That means the way these contracts are developed needs to shift from pay-per-FTE (full-time equivalent) to a consumption-based model, which we at HFS are terming 'Services-as-Software.'" Bendor-Samuel, however, expects the trend of changing contracts to fizzle out: 'It is unlikely to be a permanent trend as outcome and fixed pricing is more complicated and, over time, the FTE or time-based models, which are far simpler, are likely to win out."
Time of India
21-07-2025
- Business
- Time of India
LTIMindtree resumes fresher hiring, aims to onboard around 5,000 freshers this fiscal
Bengaluru: LTIMindtree has resumed fresher hiring, aiming to onboard around 5,000 freshers this fiscal year. Despite ongoing macroeconomic uncertainty affecting demand visibility in the IT services sector, LTIMindtree remains optimistic about talent acquisition and has returned to campus hiring this quarter. Tired of too many ads? go ad free now CEO Venu Lambu highlighted that the company is pursuing a "people-first, client-first" strategy—anchored in AI-driven transformation and a robust fresher hiring pipeline—to navigate current market challenges. In an interview with TOI, Lambu confirmed that LTIMindtree onboarded 1,600 freshers in the June quarter alone and plans to hire between 4,000 and 5,000 freshers over the course of the year. "We restarted fresher hiring this quarter and will continue adding more throughout the year. We have a comprehensive programme in place to train, upskill, and involve them in project shadowing," he said. While many industry peers are tightening utilisation policies and reassessing bench strength, LTIMindtree's utilisation remains high at 88.1%. "To sustain growth, we need more people. In fact, I'd prefer to bring utilisation down slightly," the CEO added. Regarding salary hikes and promotions, the company stated that the next appraisal cycle's decisions will be made between now and Sept. LTIMindtree last implemented raises in Oct. "It's not that we haven't made decisions—it's just that the cycle allows time. Employees will be updated in due course," Lambu clarified. In response to industry concerns about declining fresh graduate quality, LTIMindtree reiterated its commitment to structured onboarding. "We treat all our people as valuable assets. We emphasise continuous skilling and have invested heavily in AI-focused capabilities that benefit both employees and clients," the CEO said. Tired of too many ads? go ad free now LTIMindtree is also passing on productivity improvements from AI adoption to its customers. Its proprietary platform, Blueverse, has already contributed to significant early wins in large deals. These efficiencies are boosting internal operations as well, with AI-driven initiatives delivering a 50-basis point margin improvement and targeting an additional 100 basis points in upcoming quarters. Despite global economic headwinds, the company remains "cautiously optimistic," expecting to approach double-digit year-on-year growth in the second half of the financial year. Operating margins grew sequentially by 50 basis points to 14.3%. The mid-tier IT firm reported strong client metrics, with the number of clients generating over $1 million in annual revenue rising 14% year-on-year to 404. The company had 741 active clients as of June 30. LTIMindtree's revenue grew modestly by 0.8% sequentially in the June quarter and 4.4% year-on-year in constant currency, supported by strong deal momentum despite a cautious global IT services environment. Its operating margin improved by 50 basis points sequentially to 14.3%. European operations demonstrated the strongest performance with 9.7% sequential growth, whilst North America, LTIMindtree's primary market, increased by 1.8%. "I think we had a good start. That means we expanded our revenue, we expanded our margins and I see the same momentum to continue as we go into the next few quarters of the year. We are working towards a plan where I would like to see if we can come very close to the double-digit year-on-year growth sometime in the second half and at the same time increase our margin by 100 basis points. I think we did a good job at the end of the year," Lambu said. Its order book rose to $1.6 billion, up 17% year-on-year. European operations demonstrated the strongest performance with 9.7% sequential growth, whilst North America, LTIMindtree's primary market, increased by 1.8%. "All of the large deals, there is significant infusion of AI and that's where we are committing productivity. That's how most of the last deals are sort of shaping up. Number two is that in the existing business where we are serving customers, we're looking at opportunities where we can do more for them with less effort. So in a sense, if we just look at it as productivity gain being passed as it is, then that's one way of looking at it. But if I can actually construct the engagements that is okay. Can I do more work for them with less? If that is possible, I actually get more work coming my way," he added.
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Business Standard
18-07-2025
- Business
- Business Standard
LTIMindtree Q1 steady; analysts see signs of revival under new leadership
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.
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Business Standard
17-07-2025
- Business
- Business Standard
LTIMindtree Q1 net profit up 10.5% to ₹1,254.6 crore, beats estimate
LTIMindtree reported a net profit of Rs 1,254.6 crore for the first quarter of financial year 2025–26 (Q1FY26), up 10.5 per cent year-on-year (YoY). Sequentially, profit rose 11.2 per cent. Revenue for the quarter grew 7.6 per cent YoY to Rs 9,840.6 crore. Sequentially, revenue rose marginally by 0.7 per cent. The company beat estimates on net profit but missed on revenue. According to Bloomberg estimates, net profit was expected at Rs 1,194 crore and revenue at Rs 9,855.4 crore. Compared to larger peers, LTIMindtree's performance was stronger. 'We had a promising start to the year, delivering broad-based growth, expanding margins, and making significant progress on our strategic priorities. Our Fit4Future programme, sales transformation efforts and pivot to AI have enhanced agility and strengthened our ability to scale for the future,' said Venu Lambu, chief executive officer and managing director. Lambu further added that although the macroeconomic environment remains challenging, 'I'm confident that our disciplined execution and unwavering client focus will continue to drive our performance.' In terms of verticals, the growth driver for the quarter was the consumer business, which grew 6.2 per cent sequentially and 5.7 per cent YoY, followed by the BFSI segment, which grew 1.6 per cent quarter-on-quarter (QoQ) and 10.6 per cent YoY. The healthcare, life sciences and public services segment grew 4.8 per cent QoQ but declined 4.7 per cent YoY. Geographically, the US grew 1.8 per cent QoQ and 4.2 per cent YoY. Europe rose 9.7 per cent sequentially and 7 per cent YoY, while the rest of the world declined 6 per cent QoQ but grew 10 per cent YoY. For the quarter ending 30 June 2025, the company's total headcount stood at 83,889, down by 418 from the previous quarter. Attrition for the firm was at 14.4 per cent. The company also announced that its board has approved the issue of 67,252 new shares, each valued at Re 1, to the LTIMindtree Employee Welfare Trust, under its Employees Stock Option Plan of 2021 and 2015. These shares will later be transferred to eligible employees upon exercise of options.
