LTIMindtree Reports 1.5% Decline in Net Profit Due to Lower Margins

IT services company LTIMindtree reported a 1.5% decline in net profit for the June quarter while revenues grew by 5.1%. Profit margins were affected mainly due to higher visa and travel costs. The company continues to aim for an operating profit margin of 17-18% and is optimistic about future growth.

On Wednesday, IT services company LTIMindtree announced a 1.5 per cent drop in net profit to Rs 1,135 crore for the June quarter, citing lower profit margins as the primary cause.

Revenue increased by 5.1 per cent year-over-year to Rs 9,142.6 crore, though the operating profit margin fell to 15 per cent from 16.7 per cent in the same period last year. Managing Director and Chief Executive Debashis Chatterjee expressed the company's intent to reach an operating profit margin of 17-18 per cent, a target set during the company's amalgamation, but noted that achieving this goal would take more time.

He highlighted a 0.30 per cent sequential increase in margins, suggesting they would continue to rise gradually throughout the year. Higher visa and travel costs were among the factors affecting margins this quarter. LTIMindtree signed new business deals worth USD 1.4 billion during the quarter, achieving sequential revenue growth of 2.8 per cent. Chatterjee remained hopeful for continued momentum despite an unchanged macro environment.

(With inputs from agencies.)