Mumbai-based Larsen & Toubro Infotech (LTI) beat street estimates on Q3 performance, posting a 31.3 per cent sequential rise in revenue, to Rs 2,473 crore. Even profit after taxes, which was expected to be impacted by almost 10-12 per cent due to translation losses, was above estimates. LTI reported net income at Rs 375.5 crore, up 32.8 per cent over Q3 last fiscal.
“We are pleased to deliver another strong quarter with 5.6 per cent QoQ growth in USD revenues. Our broad-based revenue growth, superior margin delivery and steady cash generation in Q3 is a testimony of our focused execution and client centricity,” said Sanjay Jalona, Chief Executive Officer & Managing Director, LTI.
The company registered a net profit of Rs 273 crore and revenue of Rs 2,331.2 crore in the September quarter.
Digital revenue accounted for 37 per cent of the business growing 33 per cent year on year. Jalona added that the company is on track to report strong FY19 numbers backed by a strong deal pipeline. Large deals in the pipeline for the quarter stood at $1 billion.
LTI reported a flattish Ebitda margin of 20.6 per cent on sequential basis while on YoY basis it grew 350 basis points, backed by strong hedging.
The company added one new client in the $100 million bracket, five in the $50 million bracket and 15 in $20 million range during the quarter to bring total active client number to 314 up from 289 last year.
“The nature of client spending has changed from what it used to be earlier. We see a largely flattish spend with upward bias (for the year)," noted Jalona. He added that as long as the company can do value addition for clients, they are ready to spend.
The company, which added around 1,100 employees in the quarter, noted that sub-contracting costs as part of revenue were slightly lower in the quarter. That said, Jalona added that protectionism and immigration issues have made finding talent difficult.
In constant currency terms over the past year, North America grew 18 per cent and Banking and financial services grew 28.6 per cent. Jalona also indicated that the company's recent acquisition of Ruletronics for $7.48 million, a Pega company, was aimed at ramping capability rather than acquiring new clients.