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Key Highlights
- EBIT margin at 19.9% at record high, healthy Revenue growth of 2.3% QOQ in CC terms
- Net new TCV in excess of USD 40mn higher than Q1; but large deals remain weak as compared to FY20
- Growth led by BFS and Manufacturing segment which together contribute >46% to total revenues
Mumbai: L&T Infotech (LTI) stock gained over 5% in trade as the mid-cap IT company reported record high EBIT margin and healthy revenue growth. LTI bagged large deal with net new Total contract value (TCV) over USD 40mn in analytics. However, while the net new TCV of deals stood at over USD 40mn which is higher than the last quarter, overall large deal wins remain weak as compared to USD 332 mn in entire FY20. The board declared interim divided of Rs 15 per share (Face value Rs 1 per share).
LTI posted revenue growth of 2.3% QOQ and 10.5% YOY in constant currency (CC) terms. Revenue stood at $405 mn, up 3.6% QOQ and Rupee revenues grew by 1.7% QOQ to Rs 2998 crore. EBIT margins expanded sharply by nearly 250bps to 19.9%, this being highest ever EBIT margin since listing. Profits grew 9.7% QOQ to Rs 457cr. Utilisation improved to 80.5% vs 79.4% in the last quarter.
Share of digital revenues improved to 42.9% vs 42% in the last quarter. Digital revenues grew 5.8% QOQ and 18.4% yoy.
Growth was led by BFS (contributes 29.9% to total revenues) and Manufacturing (contributes 16.2% to total revenues) segment which together contribute nearly 46% to overall revenues. BFS grew by 9.5% QOQ in CC terms, Manufacturing grew by 5.4% QOQ and Energy vertical posted growth of 0.6% QOQ. Insurance de-grew 4.1% QOQ in CC terms, CPG & retail down 2.8% QOQ and Hi tech vertical de-grew 5.3% QOQ in CC terms.
Interms of geography mix, North America which contributes 68.7% to total revenues grew by 0.4% QOQ In CC terms, Europe grew 9.3% QOQ, Rest of world +5.9% QOQ and India grew 2% QOQ in CC terms.
“We are also happy to announce a large deal with net new TCV in excess of USD 40mn in analytics. Our large deal pipeline remains strong and we see increased traction in digital, cloud and analytics space”, said Sanjay Jalona, CEO & MD, LTI. He added, “The pandemic has made it apparent that organizations need to reimagine their target operating models embracing digital transformations to remain relevant in the marketplace. This presents tremendous opportunities for companies like us with comprehensive digital transformation capabilities.”
