LTIMindtree confident of improving operating margin 17-18%

Bengaluru, 28 November: LTIMindtree (LTIM) is hopeful increasing its operating margin to 17-18 per cent in the coming years from present 15.5 per cent level on the back of accelerating revenue growth coupled with cost optimisation measures.

“LTIM has an ongoing margin expansion programme—North Star, which focuses on 4 key areas: revenue maximization – growth, value-based pricing; bending the cost curve – pyramid and average costs, right sizing in managed services; productivity – revenue per person, AI; overheads – growing spends slower than revenue growth,” brokerage firm, Emkay Global said in a note.

Meanwhile, the company management has set an aspirational target of $10 billion by FY32 from $4.3 billion in FY24.

“The management outlined its aspirational target of reaching revenue of $10 billion from $4.3 billion in FY24. The attainment of this milestone would, however, be contingent on recovery in discretionary spending and revenue growth bouncing back to double-digits after the weakness in the last couple of years. The management is hopeful of achieving this target on an organic basis by FY32, and much earlier with acquisitions,” the report said.

The report, which was prepared after meeting the company management, pointed out that discretionary spend has not yet returned and, with the US elections now out of the way, clients would finalize their budgets in coming months. The management of LTIMindtree noted that this should provide better visibility for FY26 revenue growth.

The management noted that AI (artificial intelligence) has become a key part of deal wins as of now.

“AI is fundamentally transforming the way clients and system integrators are functioning, and LTIM aims to be at the forefront of this change. The company’s pivot to AI – AI in everything, everything for AI, and AI for everyone – has started reaping benefits, with AI now being a key part of the recent deal wins,” the report said.