The company has gained not just from global financial clients seeking digitisation solutions but also from Indian banks and clients that have turned to LTI’s analytics offerings, said Sanjay Jalona, chief executive, LTI.
On Wednesday, LTI reported its strongest quarterly performance till date with revenue growing 31.2% YoY and 9.8% sequentially to Rs 4,137 crore for the third quarter ended in December 2021. Net income grew 18% YoY and 11% over the previous quarter to Rs 612 crore.
Constant currency sequential revenue growth at 9.2% is the highest reported by the company since it got listed in 2016.
“BFSI comprises almost half of our revenue and it has been our real success story across the globe. Our capabilities in core banking offerings with Temenos have resonated well with clients,” said Jalona.
BFS segment grew 38.4% during the quarter over the same quarter last year although insurance grew 14.3%. He added that the company has also developed “deep-rooted” BFSI engagement in India with a number of clients in this space. The company is working with private sector banks and credit bureaus for fraud monitoring and compliance solutions.
Discover the stories of your interest
“Globally, we have seen a tremendous amount of growth in compliance and data analytics for products across retail banking, investment banking and mortgage-related products. Clients also need more digital ways to engage with customers and are investing in this space,” he stated.
In addition to BFSI, the company has also witnessed demand growth from areas like cybersecurity and ESG. Jalona added that the industry is witnessing a wave of “Great Restructuring” with companies shifting to the new normal leading to higher spends on IT solutions. The pace of automation and digitisation is rapidly increasing. He added that pricing has increased in “pockets”.
He added that the company witnessed broad-based growth across all segments and client buckets.“We added one client to the $50 million bucket. All client segments have grown over 25%. We added 27 new logos including one Fortune 500 client. This is the highest number of logos we have added YTD since we listed (during a quarter),” he added.
The company also gained from an increase in the share of offshore effort during the quarter. The company reported a drop in utilisation – excluding trainees and a sharp spike in attrition.
Attrition, as in the case of the sector at large, continued to remain high at 22.5% compared to 19.6% last quarter.
A report by ICICI Securities noted that LTI’s growth on a strong base from Q3 FY21 displayed strong demand instead of recovery from low numbers in the previous quarters. “Strong growth outlook and company’s consistency in execution should lead to industry-leading revenue growth prospects. We believe LTI’s FY22-24E revenue CAGR of 25% will be the highest in the industry,” noted the report.
