LTIMindtree misses Q3 profit estimates

Indian IT services firm LTIMindtree reported a smaller-than-expected profit for the third quarter on Wednesday as a challenging macroeconomic environment led to clients cutting spending.

Consolidated net profit rose 16.8% to ₹1169 cr rupees ($140.63 million) for the three months ended Dec. 31, compared with analyst estimates of ₹1176 cr rupees, as per LSEG data.

LTIMindtree, India's sixth-largest IT services firm, reported a profit of ₹1001 cr rupees a year earlier.

Revenue rose to ₹9016.6cr from ₹8620cr a year ago, but missed analyst estimates of ₹9051cr primarily due to a 1.4% fall in the Banking, Financial Services and Insurance (BFSI) vertical, the company's largest.

The management attributed the drop in revenue growth in the BFSI division to higher-than-expected furloughs.

"This vertical continues to show a cautionary approach towards new spend," CEO Debashis Chatterjee said, adding that the overall demand environment was also "extremely cautious".

Despite being a seasonally weak quarter at an industry-level, the company's deal total contract value (TCV) rose 21% year-on-year to $1.5 billion. This, according to the company, is the highest-ever.

"Against the backdrop of a continued challenging macroeconomic environment and delays in client decision making, we expect Q4 performance to remain similar to the current quarter," Chatterjee said.

The quarter saw Indian IT companies reporting mixed numbers, but with the commentary largely indicating that the demand environment has not worsened sequentially, as was feared.

Infosys, India's second-largest IT company, narrowed its revenue forecast for the year, while HCLTech , the third-largest, trimmed its forecast.

Mumbai-listed shares of LTIMindtree closed 0.64% higher ahead of its results.

_This story has been published from the Reuters news feed without any major editorial changes _