LTIMindtree — Q2 FY26 earnings call

Call held 19 Jan 2026

Management summary

LTIMindtree delivered a solid Q3 in a seasonally weak quarter with 2.4% sequential growth and margin expansion. The company is approaching double-digit YoY growth with 6.1% in Q3. Top-5 client productivity headwinds are near completion with 4 of 5 clients having transitioned. Management is sunsetting Fit4Future and launching 'New Horizons' for balanced growth and cost discipline. Wage hikes starting Q4 for 50% of population with ~1% margin impact per quarter.

Highlights

  • Q3 revenue at USD 1,208 million, up 2.4% QoQ and 6.1% YoY in dollar terms

  • INR revenue at INR 10,781 crores, up 3.7% QoQ and 11.6% YoY

  • Operating EBIT margin expanded 20 bps QoQ to 16.1%

  • PAT grew 29% YoY (adjusted); one-time labor code impact of INR 590 crores

  • Order inflow at USD 1.7 billion, up 6.4% QoQ

  • Fit4Future delivered 230 bps margin improvement over 9 months

  • Headcount at 87,958 with net additions of 1,511 including 1,736 freshers

  • Attrition declined to 13.8% from 14.2%; OCF/PAT at 129.9%

Key financials

2 periods

Headline

  • Revenue (USD)
    $1,208 Mn
    YoY +6.1% QoQ +2.4%
  • Revenue (INR)
    ₹10,781 Cr
    YoY +11.6% QoQ +3.7%
  • EBIT Margin
    16.1%
  • Adjusted PAT
    ₹1,401 Cr
    YoY +29% QoQ +1.5%
  • Order Inflow
    $1,700 Mn
    QoQ +6.4%
  • Total Headcount
    87,958 employees
  • Utilization (ex-trainees)
    86.9%
  • DSO
    85 days
  • OCF/PAT
    129.9%
  • Cash & Investments
    ₹14,558 Cr

TTM

  • Attrition
    13.8%

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.

Segment breakdown

  • Vertical Growth (QoQ USD)
    1.2% Consumer Business-70% BFSI9.4% Mfg & Resources0% TMC9.9% Healthcare/Public
  • Geography Growth (QoQ)
    40% Americas3.4% Europe14.1% RoW

Guidance & targets

Growth

  • Q4 FY26 YoY Growth Growth · Q4 FY26 · Medium confidence Near double-digit
    the plan that we have to coming closer to double digit, that has not changed... we are within the reaching distance

    — Venu Lambu

Margins

  • FY26 EBIT Margin Margins · FY26 · High confidence Better than FY25
    we are confident that we will be able to close the year at better EBIT margins than the previous year

    — Vipul Chandra

Costs

  • Wage Hike Impact Costs · Q4 FY26 - Q1 FY27 · High confidence ~1% margin impact per quarter in Q4 and Q1
    the impact could be up to 1% in each quarter, Q4 and Q1... 50% of our population in Q4

    — Vipul Chandra

Risks & concerns

  • Top-5 client concentration decline due to AI productivity journeys

    medium

    4 of 5 top clients have completed productivity transition; last one expected Q4 bottoming. No vendor consolidation risk.

    Both acknowledged

  • Wage hike impact of ~1% margin per quarter in Q4 and Q1

    medium

    50% population getting hikes in Q4, remainder in Q1 FY27; operational efficiencies to partially offset

    Management acknowledged

  • AI-driven productivity gains across client base may extend to broader accounts

    medium

    Management says top-20 is broader base with puts and takes; impact most concentrated in top-5

    Both acknowledged

  • One-time labor code impact of INR 590 crores affecting reported PAT

    low

    Non-recurring charge; adjusted PAT at INR 1,401 crores showing healthy 29% YoY growth

    Management acknowledged

Areas of evasion (2)

  • Pass-through revenue quantum
  • SG&A one-off reversal quantum

Q&A highlights

3 direct
Top-5 Client Productivity Headwind Resolution Direct
just about one client that is left now, that needs to pass through that phase... next quarter, I expect one out of that five account will eventually bottom out

Top-5 decline has been a major investor concern; near-complete resolution signals growth inflection ahead

Asked by Vibhor Singhal

Fit4Future to New Horizons Transition Direct
we are looking at sunsetting the Fit4Future program and replacing it with New Horizons which focuses in equal measure on growth as well as cost discipline

230 bps margin improvement from Fit4Future; New Horizons signals continued efficiency drive alongside growth focus

Asked by Vibhor Singhal

Deal Win Construct and FY27 Growth Aspiration Direct
to deliver an industry-leading growth, that is our aspiration. We have to up our order booking. I think we are pretty much getting there

Signals ambition for industry-leading growth in FY27, supported by improving deal momentum and broader pipeline

Asked by Sulabh Govila

1 min read 5 chapters

Detailed narrative

Solid Q3 Performance in Seasonally Weak Quarter

LTIMindtree delivered 2.4% QoQ growth to USD 1,208 million despite furloughs and fewer workdays. YoY growth accelerated to 6.1% from 4.5% in Q2. INR revenue at INR 10,781 crores grew 11.6% YoY. Manufacturing & Resources (9.4%) and Healthcare/Public Services (9.9%) led growth, while BFSI declined 0.7%.

Margin Expansion and Fit4Future Success

EBIT margins expanded 20 bps to 16.1% driven by Fit4Future efficiency program which delivered cumulative 230 bps improvement over 9 months. SG&A declined significantly with management targeting 11-11.5% range. Fit4Future being replaced by 'New Horizons' for balanced growth and cost focus. Wage hikes starting Q4 with ~1% margin impact per quarter.

Deal Momentum and Client Positioning

Order inflow at USD 1.7 billion, up 6.4% QoQ. Key wins include USD 155 million insurance deal, global financial institution strategic partnership. Positioned as one of five major partners at top global banks. Deal mix shifting to strategic renewals with wallet share capture from competitors. Average deal tenure of 3-5 years.

Top-5 Client Productivity Headwind Nearing End

4 of 5 top clients have completed AI productivity transitions. Last client expected to bottom in Q4. Management not losing wallet share but helping clients through productivity journey proactively. Growing sequentially in top tech account post-transition. BFS top accounts positioned as prime supplier.

AI Strategy and FY27 Outlook

Over 50% employees at intermediate/advanced AI skills. BlueVerse platform being deployed across clients for agentic AI. Lakshya 2031 strategy being defined. FY27 aspiration is industry-leading growth supported by improving deal momentum. 'New Horizons' enterprise transformation program launching for medium-to-long-term growth and efficiency.

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