LTIMindtree profit dips on labour law impact as revenue and deal wins remain strong
Bengaluru – India’s sixth-largest IT services company LTIMindtree reported a decline in third-quarter profit, reflecting the short-term impact of newly implemented labour codes even as revenue growth, deal momentum and hiring trends stayed resilient.
The results underline how regulatory changes are reshaping cost structures across India’s technology sector while demand conditions remain relatively stable.
Net profit for the three months ended December 31 fell by 8.3 percent to 9.71 billion rupees, primarily due to one-time charges linked to the new labour regulations. The company said these charges, amounting to around 5.9 billion rupees, weighed heavily on earnings during the quarter.
The labour codes, implemented in November, represent India’s most comprehensive overhaul of worker-related laws in decades. These reforms have had an immediate accounting impact on manpower-intensive sectors such as information technology, where employee costs form a substantial share of overall expenses.
LTIMindtree is not alone in facing this pressure. Other major IT companies, including Wipro, Tata Consultancy Services and HCLTech, have also reported profit impacts related to the same regulatory changes. Analysts see these effects as largely front-loaded, with the financial drag expected to ease in coming quarters.
Despite the profit decline, LTIMindtree delivered a solid top-line performance. Revenue for the quarter rose 11.6 percent year-on-year to 107.81 billion rupees, broadly in line with market expectations. This growth reflects steady client demand and the company’s ability to diversify beyond its largest accounts.
Order bookings emerged as a key positive highlight. The company reported record total order bookings of $1.69 billion, marginally higher than the same quarter last year. This figure was boosted by the company’s largest-ever deal, valued at $580 million, which it secured in October.
Management and analysts alike pointed to the quality of the order pipeline as an indicator of medium-term stability. Strong deal wins suggest that clients continue to commit to digital transformation and IT modernization projects, even amid global economic uncertainty.
Sector-wise performance showed mixed trends. Revenue from the banking, financial services and insurance segment, which contributes roughly one-third of LTIMindtree’s overall revenue, grew a modest 2.3 percent. This reflects cautious spending by financial institutions in certain markets.
In contrast, the consumer business segment delivered robust growth of 14.6 percent, the highest among the company’s five business units. This performance highlights rising technology spending by consumer-facing companies focused on digital channels, data analytics and customer experience platforms.
Analysts noted that LTIMindtree has managed to offset weakness among its top five clients by expanding business with mid-sized and newer clients. This broader client base has helped stabilize revenue growth and reduce concentration risk.
Market experts also highlighted steady margins and ongoing hiring as signs of operational strength. Even with the one-off labour code impact, the company’s underlying profitability metrics remain relatively healthy compared with peers.
The broader IT sector outlook remains cautiously optimistic. Larger rival Infosys recently signaled a healthy demand environment, particularly in core financial services. This suggests that while discretionary spending may be selective, essential technology investments continue.
Looking ahead, investors will closely watch how quickly LTIMindtree absorbs the labour code costs and whether margin recovery follows in subsequent quarters. The company’s strong deal wins and revenue growth provide a cushion against near-term earnings volatility.
In the longer term, analysts expect regulatory clarity and normalization of labour-related costs to restore earnings momentum. Combined with sustained demand for digital services, LTIMindtree appears positioned to navigate near-term challenges while maintaining its growth trajectory.
