Larsen & Toubro Infotech to acquire PowerupCloud

Transaction to boost LTI’s cloud services capabilities

Updated - October 17, 2019 10:49 pm IST

Published - October 17, 2019 10:15 pm IST - MUMBAI

LTI’s board on Thursday approved the acquisition./ File photo

LTI’s board on Thursday approved the acquisition./ File photo

Larsen & Toubro Infotech Ltd (LTI) has signed a definitive agreement for acquisition of 100% shareholding of PowerupCloud Technologies Pvt. Ltd. for an enterprise value of $15 million.

LTI’s board on Thursday approved the acquisition which is subject to customary closing conditions which are expected to get completed within six weeks.

PowerupCloud has capabilities in cloud consulting, migration, cloud native application development and managed services. It also specialises in Azure and GCP Cloud platforms. It has over 180 employees with capabilities in cloud consulting, cloud managed services, Al and Data Analytics. The company had a revenue of $3.50 million in FY19.

“This acquisition will help LTI strengthen its cloud services’ capabilities through a combination of right leadership, team, assets and ecosystem connects, which in turn will enable us to provide better services to our existing and new clients” said Sanjay Jalona, CEO & MD, LTI.

He said the entire consideration will be paid in cash and the deal will be funded from internal sources.

Wage hike impact

For the second quarter, LTI reported a lower net profit of ₹360 crore compared with a net profit of ₹400 crore in the same period last year. Profitability declined on account of wage hike impact, Mr. Jalona said.

“However, we are confident of meeting the guidance of 14% to 15% at net level,” he said.

Revenue for Q2 increased by 10.3% to ₹2,570 crore compared with ₹2,331 crore in the same period last year.

“In Q2, we delivered a steady 11.9% YoY growth in constant currency driven by an on-track ramp up of large deal wins that we announced earlier. We won three large deals in this quarter, all of them from new clients, aggregating to net-new TCV (total contract value) of $100 million. A healthy pipeline, continued large deal momentum and fast-growing digital services across all verticals make us optimistic about the future,” he added.

The company also announced an interim dividend of ₹12.50 for FY 20.

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