L&T Infotech posts double-digit revenue growth in Q3, profit up marginally

Mid-tier information technology (IT) services firm Larsen & Toubro (L&T) Infotech posted double-digit growth in revenue on the back of ramping up large deals. Net profit though rose marginally in the third quarter (Q3) of the current financial year. The IT firm posted a net profit of Rs 376.7 crore during the quarter, which was a marginal rise over the same period last year, when the company reported Rs 375.5 crore.

Revenues of the firm rose 13.7 per cent year-on-year (YoY) to Rs 2,811 crore during the October-December period. Sequentially, growth was 9.4 per cent. In dollar terms, revenue stood at $394.4 million, which was 14.2 per cent higher YoY, and 8.3 per cent sequentially on constant currency basis.

During the quarter, operating margin of the L&T Group company improved 70 basis points to 16.2 per cent, owing to favourable cross-currency movement.

“Our revenue growth was largely attributed to ramping up of large engagements. Our performance was broad-based, cutting across verticals and service offerings,” said Sanjay Jalona, chief executive officer and managing director, L&T Infotech.

The IT firm said it continued to witness momentum in the large deals space and won two such engagements in Q3, with a cumulative net new total contract value of more than $75 million.

Stellar performace

“The new deals in our kitty will be ramped up in the coming quarters. It will supplement our revenue growth,” said Jalona.

Among verticals, while BFS (banking, financial services) grew 8.7 per cent YoY, insurance grew 12.8 per cent in Q3. “In the past few quarters, we have seen subdued growth in the BFS segment. However, as indicated by us, spending has come back in Q3. Our current pipeline in the BFS segment looks strong,” said Jalona.

In the quarter ended December, the other key growth drivers for the company were manufacturing, energy and utilities, consumer packaged goods (CPG), retail, and pharma, among others.

In the manufacturing segment, the YoY growth was 27 per cent, while in energy and utilities, it stood at 18.7 per cent. CPG, retail, and pharma grew 20.2 per cent in Q3.

By the end of the December quarter, digital revenues of the company stood at 41 per cent of the total revenue and grew by around 26 per cent.

In geographical terms, revenue from the US grew 18.2 per cent YoY, comprising close to 70 per cent of the total revenue. Similarly, Europe grew 6.3 per cent during this period. The IT firm’s revenue from India also rose handsomely by 13.7 per cent and contributed to around 7.6 per cent of its top line.

“We have always said that India remains a geography of importance, where we serve our clients with digital offerings and we continue to win deals in the country,” said Jalona.  

The share price of L&T Infotech ended 2.38 per cent higher at Rs 1,922 on Wednesday on the BSE.