“We are now embedding AI into each of our service, reimagining with AI…Bulk of our large deals that we announced this quarter came because of that differentiated AI offering. This is one of our largest deals in the history of the company, that we signed with a manufacturing client,” said Nachiket Deshpande, chief operating officer at LTIMindtree in an interaction with ET.
In the second quarter ending September of the ongoing fiscal year 2025, LTIMindtree closed several multi-year projects including a $200 million-plus deal from a US-based manufacturer. The total order intake for the three-month period was flat year-on-year at $1.3 billion, down 7% from previous quarter.
Its large deal pipeline remains robust at $5 billion-plus with several deals close to finalisation.
Because the AI-centric approach, we were able to consolidate from four vendors to one, which is LTIMindtree. Further, the firm is cautiously working on some amount of tail rationalisation in case of no strategic improvement in client relationships, added Deshpande, who is also the frontrunner to succeed current chief executive Debashis Chatterjee whose term ends in November next year.
Deshpande pointed out that a large percentage of the deal growth will continue to be in the cost takeout space. “Basically either where we are already an incumbent, there is a vendor consolidation, where we are increasing our market share with that customer,” he said.
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The Mumbai-headquartered company was formed in November 2022 from the merger of L&T Infotech and Mindtree.Reporting its second quarter results for FY25, LTIMindtree’s revenue grew 3.2% quarter-on-quarter (QoQ) and 5.9% year-on-year (YoY) to Rs 9,432.9 crore, making a net profit of Rs 1,251.6 crore, up 10.3% QoQ and 7.7% from a year ago.
During the Q2 FY25 earnings call, LTIMindtree management said it remains cautiously optimistic on outlook with seasonal weakness in Q3 likely to result in some moderation of momentum seen over the last couple of quarters.
The IT major counts some of the GenAI pilots to be part of discretionary spending by clients, especially in its largest segment banking and financial services (BFS).
The Q2 growth was led by BFS, which saw bank clients spending on regulatory and compliance related work and less customer-facing roll-outs, especially in North America, which is 70% of its client base.
LTIMindtree will also see further deferment of margin target of 17-18% till it achieves double-digit revenue growth, impacted by the US elections and the worsening political tensions in the Middle East. Additionally, wage hikes should impact margins in Q3 ending December.
“Some of these factors which are very difficult for anybody to predict, as to when would we be able to see the improvement in those situations…That’s why the 17-18%, we’re not targeting to go to that level as yet,” Deshpande added.
According to him, intrinsically the business is seeing healthy momentum yet macroeconomic factors and seasonal weakness due to furloughs and fewer billing days, will continue to moderate growth in the quarters ahead.
