Summary
LTIMindtree Limited - Q3 FY2026 Earnings Call Summary Monday, January 19, 2026
Event Participants
Executives 3 Venu Lambu (CEO & MD), Vipul Chandra (CFO), Vikas Jadhav (Head, Investor Relations)
Analysts 8 Abhishek Shindadkar (InCred Capital), Dipesh Mehta (Emkay Global), Kawaljeet Saluja (Kotak), Manik Taneja (Axis Capital), Ravi Menon (Macquarie), Sandeep Shah (Equirus Securities), Sulabh Govila (Morgan Stanley), Vibhor Singhal (Nuvama Equities)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (USD) | USD 1,208 million | +2.4% QoQ (CC and USD), +6.1% YoY; driven by manufacturing and healthcare strength. |
| Order Inflow (TCV) | USD 1.70 billion | +6.4% QoQ; includes significant multi-year AI-led and infrastructure deals. |
| EBIT Margin | 16.1% | +20 bps QoQ; expansion driven by Fit4Future program and forex, offset by furloughs. |
| Adjusted PAT | ₹1,401 crores | +1.5% QoQ, +29% YoY; excludes a ₹590 crore one-time Labor Code impact. |
| One-time Labor Cost | ₹590 crores | US$ 66 million impact due to changes in the labor code (gratuity/leave encashment). |
| Headcount | 87,958 | Net addition of 1,511; included 1,736 freshers to optimize the pyramid. |
| Utilization | 86.9% | -120 bps QoQ from 88.1%; deliberate decline to accommodate freshers and training. |
| Attrition (LTM) | 13.8% | -40 bps QoQ; continued downward trend from 14.2% in Q2. |
| DSO | 85 days | +3 days QoQ from 82 days. |
| Cash & Investments | ₹14,558 crores | Reported at ~USD 1.62 billion; increase from ₹14,000 crores in Q2. |
Geographic & Segment Commentary
- Manufacturing and Resources: Reported robust growth of 9.4% QoQ in USD terms. Performance was bolstered by large-scale technology landscape consolidations and AI agent deployments for global manufacturers.
- Healthcare, Life Sciences, & Public Services: Grew by 9.9% QoQ. Management attributed this to project lifecycles and the ramp-up of the India-based PAN deal within the Rest of the World geography.
- BFSI: Declined by 0.7% QoQ. The segment is facing “productivity journey” headwinds in top accounts; however, LTIMindtree was recently named a prime vendor for five out of seven major global banks.
- Geographies: Rest of the World led growth at 14.1% QoQ, followed by Europe at 3.4% and the Americas at a modest 0.4%.
Company-Specific & Strategic Commentary
- BlueVerse™ Ecosystem: Strategic shift toward “Agentic AI,” deploying AI agents for autonomous IT operations and business workflows. Secured a patent for BlueVerse™ Knowledge Fabric to improve software delivery efficiency.
- New Horizons Program: Launching as a successor to Fit4Future to drive medium-to-long-term transformation. The program focuses equally on growth acceleration and sustained cost discipline.
- Lakshya 2031: A long-term group-wide strategic initiative currently in development. Management plans to disclose specific strategy and “ambitious” targets before the end of the fiscal year.
- Talent Upskilling: Over 50% of employees have achieved intermediate/advanced AI skills; 70% of the workforce is covered under Tech + Domain convergence training.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Near double-digit YoY by Q4 FY26 | Management expects momentum to continue based on deal pipeline and AI traction. |
| Operating Margins | Higher than FY25 levels | Despite wage hikes in Q4/Q1, efficiency levers through “New Horizons” are expected to offset impacts. |
| BFSI Performance | Bottoming out in Q4 FY26 | Top client productivity transitions are expected to conclude, leading to an accelerated FY27 trajectory. |
| Wage Hikes | Spanning Q4 FY26 & Q1 FY27 | 50% of the population to receive hikes in Q4; estimated impact of ~1% per quarter. |
Risks & Constraints
| Risk | Context |
|---|---|
| Client Concentration | The top two accounts represent ~18-19% of revenue. While declining from ~23% YoY, material shifts in these accounts impact overall growth. |
| Productivity Headwinds | Clients are reimagining spend through AI-led productivity. This leads to short-term revenue “leakage” as existing book-of-business is optimized at lower costs. |
| Macro Volatility | Management noted a “day-to-day variable world.” Furloughs and fewer working days in Q4 pose seasonal margin pressures. |
Q&A Highlights
BFSI & Top Account Performance
- Question: What is driving the decline in top five clients and when will it bottom out? (Vibhor Singhal)
- Answer: Clients are undergoing an “AI productivity journey” to optimize existing books of business. Four of the top five accounts have transitioned; the final large account is expected to bottom out in Q4 FY26 (Venu Lambu).
Margin Levers & Wage Hikes
- Question: How will margins be impacted by wage hikes in the coming quarters? (Manik Taneja)
- Answer: Wage hikes will be split across Q4 and Q1, with an impact of ~100 bps each quarter. Efficiency gains from the “New Horizons” program and pyramid optimization are intended to mitigate this (Vipul Chandra).
Deal Architecture & TCV
- Question: Is there a change in deal tenures or renewal structures? (Sulabh Govila)
- Answer: Tenures remain at 3-5 years. Renewals have become “inflection points” where LTIMindtree is successfully winning wallet share from incumbent “tail vendors” rather than just extending contracts (Venu Lambu).
Hedging Policy
- Question: Will you revisit the long-term hedging policy given rate volatility? (Kawaljeet Saluja)
- Answer: No change to the systematic hedging policy. Current average portfolio rate is ₹91.29. Mark-to-market losses in OCI will be offset by EBIT gains if exchange rates remain at current levels (Vipul Chandra).
Key Takeaway
LTIMindtree delivered a resilient Q3 FY2026, characterized by 2.4% sequential CC growth and a 20 bps expansion in EBIT margins to 16.1%, despite seasonal furlough headwinds. The quarter was marked by a strong order inflow of USD 1.7 billion, fueled by the “Agentic AI” focus and the BlueVerse™ platform. While the BFSI segment and top-five client bucket saw slight declines due to proactive AI-led productivity transitions, Manufacturing and Healthcare posted near double-digit growth. Management successfully transitioned from the Fit4Future cost-savings program to “New Horizons,” aiming for higher operational efficiency to offset upcoming wage hikes. LTIMindtree is currently repositioning from a technology partner to a “business creativity partner,” targeting near double-digit YoY growth by Q4 FY2026. Looking ahead, the company remains focused on its Lakshya 2031 strategy, with plans to outpace industry growth as top-account productivity cycles bottom out.
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