L&T Infotech Q1 profit up 27.7% to ₹634 cr on large deal wins

Larsen & Toubro Infotech, a subsidiary of engineering and construction major Larsen & Toubro Limited, has reported a 27.7% rise in net profit at ₹634.4 crore in April-June quarter of FY23 as compared to ₹496.8 crore during the same period last year, primarily on large deal momentum. However, the company's profit on a quarter-on-quarter basis declined 0.5% from ₹637.5 crore in Jan-March 2022.

L&T Infotech's revenue from operations rose 30.6% on a year-on-year basis to ₹4,522.8 crore in Q1 FY23 as compared to revenue worth ₹3,462.5 crore during Q1 FY22. L&T Infotech's EBITDA margin also declined to 18.4% during the said quarter from 18.7% during the same period last year.

Banking and financial services contributed maximum 34.2% to the total revenue, followed by insurance (13.4%), manufacturing (16.8%), energy & utilities (8.8%), CPG, retail, pharma (10.3%), high-tech, media & entertainment (11.7%), and others (6.3%).

In terms of services, ADM and testing accounted for a maximum of 34.5% of the total revenue of L&T infotech, while its maximum business (68.1%) came from North America. During the said quarter, the top 5 clients contributed 29% of its total revenue, a growth of 26.8% YoY.

As of Q1 FY23, the total headcount of the company increased to 48,766 from 38,298 during the same period last year. The attrition remained high at 23.8% at the end of the said quarter, which rose from 15.2% during the same period last year.

Sudhir Chaturvedi, president of sales and executive board member, says “We are pleased to report 26.6% YoY revenue growth in constant currency. We added 4 global Fortune 500 logos to our client list in Q1, taking our total global Fortune 500 customers to 77. We are also happy to announce 4 large deal wins during the quarter with net new TCV of $79 mn.”

Nachiket Deshpande, chief operating officer and executive board member, says the company's healthy pipeline will ensure the company maintains a large deal of momentum. "Our sustained net headcount addition reflects our confidence and continued focus to deliver strong growth in FY23,” says Deshpande.

Larsen & Toubro (L&T) in May announced a merger between two of its publicly traded software companies -- L&T Infotech and Mindtree -- to create a large-scale IT services provider exceeding $3.5 billion. The merger was a share swap deal at a ratio of 73 shares of LTI for every 100 shares of Mindtree.

Parent company L&T holds a 68.73% stake in LTI after the merger. Mindtree, which announced its Q1 FY23 earnings on Wednesday, reported a 37.3% growth in profit at ₹471.6 crore. The company's revenue during the said quarter grew 36.2% to ₹3,121.1 crore.

L&T Infotech is the third major company to announce quarterly earnings after IT service bellwether Tata Consultancy Services (TCS) and HCL Technologies. TCS reported a 5.2% year-on-year growth in consolidated net profit at ₹9,478 crore for the quarter ending June 30, 2022. HCL Tech’s Q1 net profit grew 2.4% to ₹3,283 crore, while its revenue stood at ₹23,464 crore, up 16.9% year-on-year.

Meanwhile, the L&T Infotech share closed 3% down at 3,895 today on the National Stock Exchange (NSE).