After a better performance in the third quarter compared with the earlier two quarters, Larsen & Toubro Infotech Ltd. (LTI) is expected to close FY20 with a double-digit growth, said the company’s CEO & MD.
“In terms of operating profit, LTI has improved profit margin 70 basis points quarter-on-quarter due to a lot of work on enhancing operations and execution. The margin improvement has come despite lesser forex gains in this quarter,” Sanjay Jalona, CEO and MD, LTI said in an interview.
In its guidance, LTI said its performance in the second half this year will be better than in the first half due to new business development initiatives taken up in the first half. “We see double digit growth in FY20,” he added. In Q3 FY20, the company reported a revenue of $394.4 million, a growth of 8.4% QoQ and 13.7% YoY and constant currency revenue growth of 8.3% QoQ and 14.2% YoY.
In rupee terms, revenue was at ₹2,811 crore, a growth of 9.4% QoQ and 13.7% YoY· Net Income at ₹376.7 crore grew 4.6% QoQ and 0.3% YoY. In terms of M&As in Q3FY20, the company completed the acquisition of 100% shareholding of PowerupCloud and it is now a whollyowned subsidiary of LTI.
“The acquisition has enhanced our existing capabilities in cloud and I think we will able to leverage that capability with our broader global client set. And we continue to look for capability led acquisitions,” he added. In the last 12 months, the company did four such acquisitions.
“From M&A perspective 2019 has been a eventful and successful year for LTI in adding its digital capabilities and that that path will continue in the future,” he said.
Providing opportunities
Currently North America continues to provide a lot of opportunity for the company and it has been trying to cultivate new markets in Europe. “We are looking at Germany, Switzerland in addition to our traditional markets such as France, Nordics,” he said.
“Our strategy remains growing large accounts and opening new accounts, which will become invest accounts in the future. We focus on creating differentiation in focus areas such as analytics experience, automation IoT and cloud. And these are the areas where we continue to focus and make investments,” he added
Since going public the company has done six acquisitions and each one of these capability led acquisitions, actually fits into these buckets, where these have positioned the company very differently in front of its customers, he said.
