Here’s Why LTIMindtree Tumbled, The Most in Last 3 Years

LTIMindtree stock price declined over 10 percent intraday on January 18, 2024, a day after the company declared its December quarter earnings.

LTIMindtree Limited is an Indian multinational information technology services and consulting company based in Mumbai. Larsen & Toubro (L&T) incorporated the company in 1996, and it operates as a subsidiary. It is one of the top Big Tech (India) companies.

In 2001–2002, the company changed its name from L&T Information Technology Limited to Larsen & Toubro Infotech Limited. Then, in May 2022, it was announced that Mindtree, another IT services subsidiary of Larsen & Toubro at that time, would merge into LTI, and the company would be renamed LTIMindtree.

This comes after the company’s Q3 earnings missed the Street’s estimates on all major fronts.

The company experienced a sequential increase of 0.6 percent in its net profit to Rs 1,169 crore in Q3, and the revenue saw a 1.2 percent rise on-quarter to Rs 9,016 crore. The operating margin contracted to 15.4 percent in Q3, compared to 16 percent last quarter, due to high furloughs and low discretionary spending.

The company also postponed its ambition to achieve a 17-18 percent operating margin by a few quarters because of hiring delays.

LTIMindtree experienced a sequential increase of 0.6 percent in its net profit to Rs 1,169 crore in Q3. The revenue saw a 1.2 percent rise on-quarter to Rs 9,016 crore. The operating margin contracted to 15.4 percent in Q3, compared to 16 percent last quarter. This was due to high furloughs and low discretionary spending.

Also read: Stock Market Today: HDFC Bank Falls 10% in 2 Days; LTIMindtree Plunges After Q3 Earnings

The company also postponed its ambition to achieve a 17-18 percent operating margin by a few quarters because of hiring delays.

“Our strong operational performance in a seasonally weak quarter speaks about the organization’s resilience amid the continuing macro challenges. For the quarter, we reported a revenue of USD 1.08 billion, a 3.5 percent YoY growth in USD terms, an EBIT margin of 15.4 percent, an increase of 150 bps YoY, and a PAT margin of 13 percent, an increase of 140 bps YoY,” said Debashis Chatterjee, Chief Executive Officer and Managing Director at LTIMindtree.

“We have booked our highest-ever order inflow at USD 1.5 billion, representing a 21 percent increase YoY, and our strong cash flow metrics helped us cross Rs 10,000 crore in cash and investment balance. These strong indicators make us confident to deliver on our path to success as we enter the new year,” he added.

Key financial highlights: (Source: BSE)

Quarter ended December 31, 2023

1. In US Dollar Terms:

• Revenue at $1,083.7 million (growth of 0.8 Percent QoQ and 3.5 percent YoY)
• Net profit at $140.5 million (growth of 0.1 percent QoQ and 15.6 percent YoY)

2. In Rupee Terms:

• Revenue at Rs 90,166 million (growth of 1.2 percent QoQ and 4.6 percent YoY)
• Net profit at Rs 11,693 million (growth of 0.6 percent QoQ and 16.8 percent YoY)

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