Mid-tier IT company Larsen & Toubro Infotech on Tuesday reported a 16.8 per cent jump in March quarter net profit to Rs 637.5 crore, driven by healthy growth in its revenue on higher deal flow.
The company had recorded a net profit of Rs 545.2 crore a year ago.
The revenue from operations increased by 31.57 per cent to Rs 4,301.6 crore during the reported period, from Rs 3,269.4 crore in the March 2021 quarter.
The company, an arm of engineering, procurement and construction major L&T, reported an 18.6 per cent growth in its post-tax net profit at Rs 2,298.5 crore for FY22, making the fiscal its best year in its 25-year history.
The banking and financial services sector continued to be the top contributor to LTI revenue with a 32.7 per cent share.
Amid reports of a merger announcement between LTI and group company Mindtree, LTI’s chief executive and managing director Sanjay Jalona declined to comment on what he termed as “speculation”, and added that the company wishes to focus on its own business, which is growing fast.
For the reporting quarter, its revenue grew 31.6 per cent to Rs 4,301 crore on the back of growth across sectors and geographies, and Jalona said he is confident about the IT sector continuing to grow for the next three years.
The company wishes to be in the top quadrant of growth in the IT sector and the same will help protect its margins as well, Jalona said, giving guidance to maintain a net profit margin in the 14-15 per cent band. For the reporting quarter, the margin number was 14.8 per cent.
There will be an impact of 2.60 per cent on the margins front in the first quarter because of salary hikes, which average higher single digits for its staff in India, Jalona said, adding that it will try to make up for the pressures through higher revenue growth and also deploying other operational levers.
LTI is targeting to hire at least 6,000 freshers from campuses in FY23, Jalona said, adding that the number may go up as per the business outcomes during the course of the fiscal year. In FY22, it hired 6,200 freshers in total against an initial plan to hire 5,500 freshers, he added.
At a net level, it added nearly 11,000 people in FY22 and the overall headcount currently stands at 46,648. Jalona acknowledged that there is a shortage of hands currently, adding that the company can deploy 5,000 more people on the projects if it had the employees.
The attrition number has inched up to 24 per cent for the quarter against 22.5 per cent, while Jalona hinted that the talent situation will continue to be under pressure as the demand for services grows.
He added that it is not just rivals in the IT industry with which it is competing for talent but also startups and the automobiles sector.
For the quarter under review, it signed four large deals which included three repeat customers and one new, Jalona said, adding that the pipeline for new deals is very strong. The reported total contract value (TCV) of new deals was USD 80 million.
North America contributed 65.6 per cent to LTI’s revenue during the March 2022 quarter and recorded growth of 26.3 per cent. The India business of the company grew by 42.1 per cent year-on-year basis, and it accounted for about 10 per cent of the total revenue of LTI.
Its revenue from Europe was 16.2 per cent of the total pie, and it grew by 25.3 per cent on a year-on-year basis.
The company does not have any presence in either Russia or Ukraine, but needs to be cautious of geopolitical events, given the volatile and uncertain world, Jalona said.
The board of directors on Tuesday recommended a dividend of Rs 30 per equity share for FY22.
The LTI scrip closed 6.49 per cent down at Rs 5,486.15 apiece on the BSE on Tuesday as against a correction of 1.23 per cent on the benchmark, driven majorly by the investors’ unease with the merger speculation. PTI AA PRS BAL BAL
