BENGALURU (Reuters) – India’s LTIMindtree reported a lower-than-expected first-quarter profit on Monday as some of its clients cut spending due to a challenging macroeconomic environment, while higher employee-related expenses ate into margins.
The IT services and consulting firm’s consolidated net profit after tax rose 4.1% to 11.52 billion rupees ($140.44 million) for the three months ended June 30, compared with 11.07 billion rupees a year earlier.
Analysts, on average, expected a profit of 11.82 billion rupees, according to Refinitiv IBES data.
The company saw less spending from verticals like health, lifesciences, retail, media and entertainment, while revenue from its banking, financial services and insurance segment rose a meagre 4.2% from a year earlier.
Indian IT services companies have started earnings on a weaker note for the June quarter, with the country’s top Tata Consultancy Services warning of uncertain near-term demand.
HCLTech and Wipro have also flagged discretionary spending cuts from clients.
LTIMindtree’s earnings before interest and taxes, depreciation, and amortisation margins or EBITDA margin fell to 18.8% from 19.5% a year earlier, while profit margins dropped to 13.2% from 14.5% a year earlier.
Revenue from operations rose 13.8% to 87.02 billion rupees, while total expenses jumped by nearly 15%.
Last week, LTIMindtree replaced Housing Development Finance Corporation (HDFC) in the benchmark Nifty 50 index.
Shares of the Mumbai-based IT firm ended 0.82% higher on Monday ahead of results, while the benchmark Nifty 50 index gained 0.75%.
($1 = 82.0290 Indian rupees)
(Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Sohini Goswami)
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