LTIMindtree is set to report encouraging financial results in Q1 FY25 on July 17, with all key metrics revenue, net profit, and operating margins swinging back to the growth trajectory after a quarter of contraction. The IT firm’s April-June revenue expansion would likely be driven by robust performances in the BFSI and Hi-Tech verticals, along with the ramp-up of large deals.
According to an average of nine brokerage estimates compiled by Moneycontrol, LTI Mindtree’s consolidated revenue from operations would rise 1.5 percent quarter-on-quarter to Rs 9,030 crore in Q1 FY25. Consolidated net profit is expected to rise 3.4 percent quarter-on-quarter to Rs 1,138 crore.
"Q1 will be a growth quarter driven by continued traction in the manufacturing vertical. We expect BFSI to turn around and perform marginally better, while Hi-Tech should maintain its momentum from Q4," ICICI Securities said in a preview report.
BNP Paribas said, "Strong deal wins give us comfort that the worst revenue performance is likely behind us."
What factors are driving the earnings?
1. Revival in BFSI Assignments and Hi-Tech Recovery: The BFSI sector is expected to see a turnaround, with analysts noting that delayed projects from Q4 are now ramping up. Hi-tech, which showed promise in the previous quarter, is also likely to continue its positive trajectory.
2. Large Deal Ramp-Up: Significant large deals secured in previous quarters are anticipated to contribute to the revenue, with many brokerages, including Axis Securities and Emkay Global, highlighting this as a critical growth driver.
3. Cost Efficiencies and Margin Expansion: As per Moneycontrol's estimates, EBIT margin for the June quarter is anticipated to increase by 30 basis points sequentially to 15 percent, driven by revenue growth, cost efficiencies, and the absence of one-off project cancellations.
Also Read | LTIMindtree appoints SN Subrahmanyan as chairman after AM Naik steps down
What to look out for in the quarterly show?
As LTIMindtree prepares to post its Q1 FY25 earnings on July 17, several key aspects will be in focus for investors.
Investors will closely watch LTIMindtree management's commentary on performance and outlook across various verticals (BFSI, Hi-Tech, and manufacturing), the deal pipeline, and margin outlook. Key monitorables will include the impact of macro headwinds on demand and the recovery of discretionary spending, updates on revenue, cost synergies from the LTIMindtree merger, hiring plans, attrition trends, and investments in Generative AI partnerships and solutions.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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