LTIMindtree — Q2 FY25 earnings call

Call held 20 Jan 2025

Management summary

LTIMindtree delivered a solid Q2 FY25 with margin expansion driven by operational efficiencies. The company saw broad-based growth across verticals with strong deal momentum. Management continued focus on AI-driven transformation and large deal pipeline development.

Highlights

  • Q2 revenue growth strong but specific numbers from earlier filing period

  • EBIT margin at 15.5% before wage hike impact

  • Growth momentum across verticals with BFSI leading

  • Deal wins strong with order inflow around USD 1.5 billion range

  • Headcount growing with net additions

  • Attrition around 14.3% level

  • Focus on large deal wins and AI-led delivery models

  • Strong cash generation continuing

Concerns

  • Upcoming wage hike expected to impact Q3 margins by ~200 bps

Key financials

  1. EBIT Margin 15.5%
  2. Attrition 14.3%
  3. OCF/PAT 74.2%

What they filed

Q1 FY27: revenue up 18.0%, net profit up 17.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue9,433 9,661 9,772 9,841 10,394 +10%10,781 +12%11,292 +16%11,608 +18%
EBITDA1,699 1,593 1,596 1,649 1,930 +14%2,003 +26%1,973 +24%2,061 +25%
Net profit1,252 1,087 1,129 1,255 1,381 +10%960 −12%1,387 +23%1,469 +17%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Growth

  • H2 FY25 Growth Growth · H2 FY25 · Medium confidence Continued momentum
    growth momentum expected to continue

    — Debashis Chatterjee

Risks & concerns

  • Upcoming wage hike expected to impact Q3 margins by ~200 bps

    high

    Management pre-flagged significant margin impact for Q3

    Management acknowledged

  • Client focus on cost reduction may limit pricing power

    medium

    Productivity demands from clients increasing

    Management acknowledged

Areas of evasion (1)

  • Specific margin guidance

Q&A highlights

3 direct
Deal Pipeline Strength Direct
continuing client focus on cost reduction and large deal pipeline

Strong deal wins provide revenue visibility

Asked by Multiple

Margin Outlook Pre-Wage Hike Direct
margins at 15.5% before anticipated wage hike impact in Q3

Q2 represented peak margins before wage hike headwind

Asked by Multiple

AI Transformation Progress Direct
AI-led delivery models gaining traction in deal wins

AI capabilities becoming key differentiator in deal wins

Asked by Multiple

1 min read 3 chapters

Detailed narrative

Solid Q2 Performance

LTIMindtree delivered broad-based growth in Q2 FY25 with EBIT margin at 15.5%. Deal momentum continued with order inflow around USD 1.5 billion. Attrition stable at 14.3%.

Margin Peak Before Wage Hikes

Q2 represented the peak margin point before upcoming wage hikes expected to impact Q3 by approximately 200 bps. Management pre-flagged this impact.

AI and Deal Strategy

Company continued to win deals leveraging AI-led delivery models. Focus on large transformational deals and strategic partnerships driving revenue quality improvement.

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