LTIMindtree’s margin mission: Venugopal Lambu's blueprint for an AI-powered, leaner future

Earlier this year, in January, the largest tech company in the L&T portfolio—LTIMindtree—announced Venugopal Lambu as its next CEO. This marks his second stint with the company. Three months into his reinduction as CEO-designate, Lambu laid out LTIMindtree’s roadmap for the coming year during the company’s Q4 earnings call last week.

Lambu told analysts that, following over 100 meetings with various stakeholders across markets, the company has identified three key areas of prioritisation for FY26.

Driving Revenues Through Sales Transformation and AI Integration

As part of its organisational revamp, Lambu said the company is rewiring its sales engine by simplifying the sales structure and service lines, along with strengthening leadership in high-potential businesses. LTIMindtree has also consolidated its Growth Office under Krishnan Iyer, with all service line heads reporting to him. Additionally, delivery operations have been streamlined under Chief Delivery Officer Ram Khizamboor. Both Iyer and Khizamboor now report directly to Lambu.

AI integration into sales processes will also be a key focus. “The framework for this organisation in the context of AI differs significantly from traditional methods. It focuses on the proactive integration of new-age technologies into clients' IT systems as well as our own service delivery processes,” Lambu said.

Former COO Nachiket Deshpande, now President of Global AI Services, Strategic Deals and Partnerships, and based in the US, will lead the company’s new go-to-market strategy. While LTIMindtree expects results to emerge soon, Lambu added, “Sales transformation is not about overhauling the sales structure. It's about getting better at what we are doing. There is a chance to improvise our playbook as client expectations change.”

Cost Optimisation and Profitability Through ‘Fit4Future’

LTIMindtree is also focusing on rationalising operational costs and improving profitability. In FY25, operating margins (EBIT) declined by 120 basis points year-over-year—from 15.7% in FY24 to 14.5% in FY25.

At the company’s investor day in November last year, LTIMindtree outlined its margin expansion strategy under ‘Project NorthStar’, stating its aspiration to become a $10 billion firm with EBIT margins of 17–18%.

Under Lambu’s leadership, the company will reevaluate its processes, team structures, and increase the use of AI to drive efficiencies. “The programme will target productivity improvements in all areas—sales, delivery, and business-enabling units—by maintaining an optimal and efficient bench process, optimising span of control, etc. It should start yielding results through margin improvements during the year,” Lambu said.

The company expects these efforts to reflect in improved margins beginning Q1 FY26.

Brokerages Hold Mixed Views

Brokerages have expressed mixed views on LTIMindtree stock. BNP Paribas Exane Research, in its report dated 23 April, noted that strong deal bookings in 2H FY25 and the end of productivity-related headwinds may help LTIMindtree’s growth recover in 1H FY26. The firm believes LTIM could outperform larger IT peers. While it expects year-over-year margin moderation in FY26, the report notes that higher exposure to discretionary spending could support margins if demand improves.

BNP maintained an ‘Outperform’ rating: “We cut our FY26–27E EPS to reflect Q4 results and commentary, but expand our long-term margin estimates as we build in a gradual recovery. We introduce our FY28E. Our DCF-based target price rises to INR 4,850. Our implied target multiple is at a slight discount to TCS (vs a historical premium over the last five years), reflecting higher uncertainty around our growth estimates.”

Meanwhile, Nomura, in its 23 April report, stated: “While management indicated that margin improvement and revenue growth are likely to begin from Q1 FY26 (as productivity pass-through headwinds in the top tech account are over), we believe that a sharp improvement in margin requires very strong revenue growth. We expect EBIT margins of 14.4–15.4% over FY26–27F versus 14.5% in FY25.” Nomura has made a ~2% cut in its FY26–27F EPS estimates and retained a ‘Neutral’ rating.