India's LTIMindtree's Q4 revenue misses estimates as banking vertical bites

Reuters

Updated 24 April 2024 at 9:01 am·2-min read

Bengaluru (Reuters) -LTIMindtree, India's sixth-largest software company, posted a smaller-than-expected fourth-quarter revenue on Wednesday amid weakness in its banking vertical.

Consolidated revenue rose 2.3% to 88.93 billion rupees ($1.07 billion) in the January-March quarter, falling short of analysts' estimates of 89.82 billion rupees, as per LSEG data.

The company's banking, financial services and insurance (BFSI) vertical, its largest revenue driver, fell 6.6% year-on-year in the reporting quarter.

High inflation and geopolitical risks have pushed clients to cut down on discretionary tech spending, with industry body Nasscom estimating that overall revenue growth in the sector more than halved to 3.8% in the financial year 2024.

"As far as the overall BFSI is concerned, we did have unexpected cancellations of two projects in that client base, resulting in some impact on margin. These are all resulting from decisions where clients have reprioritised their spends," said CEO Debashis Chatterjee.

The Mumbai-based company's net profit fell 1.2% to 11.01 billion rupees during the quarter. Analysts, on average, expected a profit of 11.58 billion rupees, as per LSEG data.

Macro- and geopolitical issues are still weighing on the overall demand recovery, Chatterjee added.

LTIMindtree, formed through the merger of two L&T Group subsidiaries, erstwhile Mindtree and L&T Infotech in 2022, saw a slew of senior-level exits over the past few months amid merger-related integration risks.

Earlier this month, market leaders Tata Consultancy Services and Infosys posted lower-than-expected revenue.

The L&T Group firm's total order bookings were at $5.6 billion for the full year, compared with $4.87 billion in fiscal 2023.

LTIMindtree's full-year revenue was up 4.4% in terms of constant currency, while it rose 19.9% in the fiscal year 2023.

The company's shares closed 0.1% higher ahead of the results.

($1 = 83.2690 Indian rupees)

(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Sonia Cheema and Sohini Goswami)

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