LTIMindtree Ltd:Annual Report 2023-24 Analysis

LTIMindtree Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History #

LTIMindtree was formed in November 2022 through the merger of Larsen & Toubro Infotech (LTI) and Mindtree. LTI was originally a part of the Larsen & Toubro group, while Mindtree was founded in 1999 by ten IT professionals.

Headquarters Location and Global Presence #

The company’s headquarters are located in Mumbai, India. LTIMindtree has a global presence with offices and development centers across North America, Europe, Asia-Pacific, and the Middle East.

Company Vision and Mission #

• Vision: To engineer meaningful technology solutions that impact the world.
• Mission: To help clients reimagine business models, accelerate innovation, and maximize growth by taking them on the path to digital transformation.

Key Milestones in Their Growth Journey #

• 1999: Mindtree established.
• Late 2000’s - Early 2010’s: Mindtree establishes and grows its service offerings and global footprint.
• 1997: L&T establishes L&T Information Technology Limited (LTI).
• Early 2000’s - 2022: LTI grows and establishes itself as a major player in the IT services industry.
• 2022: Merger of LTI and Mindtree to form LTIMindtree.

Stock Exchange Listing Details and Market Capitalization #

LTIMindtree is listed on the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE). As of late 2023, its market capitalization is significant, placing it among the leading IT services companies in India. You can find the latest market capitalization data on financial websites like the NSE, BSE, and Google Finance.

Recent Financial Performance Highlights #

LTIMindtree reports its financial performance quarterly and annually. Recent highlights typically include revenue growth, profitability margins, earnings per share, and key deal wins. These details are available in their official press releases and investor presentations.

Management Team and Leadership Structure #

The company is led by a CEO and has a board of directors comprising experienced professionals from diverse backgrounds. Detailed information about the management team and board can be found on the LTIMindtree website.

Any Notable Awards or Recognitions #

LTIMindtree receives awards and recognitions for its work in areas like innovation, employee satisfaction, sustainability, and customer service. Recent awards and recognitions are typically showcased on their website.

Their Products #

Complete Product Portfolio with Categories #

LTIMindtree offers a comprehensive portfolio of IT services and solutions, categorized as follows:

• Consulting: Business Consulting, Digital Consulting, Technology Consulting
• Digital Solutions: Digital Transformation, Cloud, Data and Analytics, AI and Automation, Customer Experience, Enterprise Solutions, Cybersecurity
• Engineering Services: Product Engineering, Manufacturing Operations, Digital Plant, Connected Devices

Flagship or Signature Product Lines #

The company doesn’t necessarily have discrete “products” in the traditional sense of packaged software, but rather focuses on comprehensive service offerings. However, they are known for their expertise in:

• Cloud Transformation: Helping businesses migrate to and manage cloud environments (AWS, Azure, Google Cloud).
• Data and Analytics: Providing data-driven insights through analytics, AI, and machine learning.
• Enterprise Solutions: Implementing and optimizing ERP systems (SAP, Oracle, Salesforce).

Key Technological Innovations or Patents #

While they may not publicly disclose specific patents extensively, LTIMindtree invests in R&D in areas like AI, blockchain, IoT, and cloud computing. These investments translate into innovative solutions and services for their clients.

Primary Customers #

Target Industries and Sectors #

LTIMindtree serves a wide range of industries, including:

• Banking, Financial Services, and Insurance (BFSI)
• Manufacturing
• Retail, CPG and Travel
• Healthcare
• Technology, Media & Entertainment

Geographic Markets (Domestic vs. International) #

LTIMindtree operates in both domestic (India) and international markets. A significant portion of their revenue comes from North America and Europe. They are also expanding their presence in the Asia-Pacific region.

Major Competitors #

Direct Competitors in India and Globally #

Key competitors include:

• Tata Consultancy Services (TCS)
• Infosys
• Wipro
• HCLTech
• Accenture
• Capgemini
• Cognizant
• IBM

Competitive Advantages and Disadvantages #

Advantages:

• Strong domain expertise across multiple industries
• Comprehensive service portfolio
• Customer-centric approach

Disadvantages:

• High competition in the IT services market
• Reliance on key clients

How They Differentiate From Competitors #

LTIMindtree differentiates itself through:

• Focus on specific industry verticals
• Strong engineering heritage from L&T
• Agile and collaborative approach

Industry Challenges and Opportunities #

Challenges:

• Talent shortage
• Economic uncertainty
• Evolving technologies

Opportunities:

• Digital transformation initiatives
• Cloud adoption
• Demand for data analytics and AI

Future Outlook #

Expansion Plans or Growth Strategy #

LTIMindtree is focused on expanding its presence in key markets, strengthening its service offerings, and investing in emerging technologies. Their growth strategy includes organic growth, strategic acquisitions, and partnerships.

Sustainability Initiatives or ESG Commitments #

LTIMindtree is committed to sustainability and has implemented various initiatives to reduce its environmental footprint and promote social responsibility. Details about their ESG commitments can be found in their annual reports and sustainability reports.

Industry Trends Affecting Their Business #

Key industry trends affecting LTIMindtree include:

• Cloud computing
• Artificial intelligence
• Data analytics
• Cybersecurity
• Digital transformation

Long-Term Vision and Strategic Goals #

LTIMindtree aims to be a leading global technology consulting and digital solutions company, helping clients transform their businesses and achieve their strategic goals. They aim to do this through client success, people success, and profitable growth.

Comprehensive Performance Overview #

3-Year Trend Analysis of Key Financial Metrics #

• Revenue: Consolidated revenue increased by 7.0% year-over-year (YoY) in FY24, reaching INR 355,170 Million.
• Profitability: EBITDA margin stood at 18.0% for FY24 compared to 18.4% for FY23. EBIT margin was 15.7% for FY24 compared to 16.2% for FY23. Net profit (PAT) margin was 12.9% for FY24, a decrease from 13.3% in FY23.
• Return on Equity (ROE): ROE was 25.0% for FY24, a decrease from 28.6% for FY23.
• Return on Capital Employed (ROCE): ROCE stood at 30.7% for FY24, a decrease from 34.9% for FY23.
• Earnings Per Share (EPS): Diluted EPS increased by 3.8% from INR 148.83 in FY23 to INR 154.48 in FY24.
• Cash and investment balances: Increased to ₹115,596 million as of March 31,2024 from ₹83,903 as of March 31, 2023.
• Order Inflow: Booked at USD 5.64 Billion, representing 15.7% growth over FY23.
• Free Cash Flow: Increased to INR 48,366 for FY24 against 21,599 for FY23.
• Current Ratio: Improved to 3.3 as of March 31, 2024, from 3.1 as of March 31, 2023.
• Day Sales Outstanding (DSO): Improved to 80 days as of March 31,2024 from 91 days as March 31,2023.

Business Segment Performance #

• Banking, Financial Services & Insurance (BFSI): Revenue grew by 2.2% YoY.
• Technology, Media & Communications: Revenue increased by 1.7% YoY.
• Manufacturing & Resources: Revenue saw significant growth of 14.6% YoY.
• Consumer Business: Revenue grew by 2.3%.
• Healthcare, Life Sciences & Public Services: Revenue grew by 6.1%.
• Geographical Revenue: North America increased by 5.9%, Europe by 3.5% and the rest of the world decreased by 3.0%.

Major Strategic Initiatives and their Progress #

• LTIMOne Framework: Implementation of the LTIMOne framework, based on Culture, Go-To-Market (GTM) strategy, Capabilities, and Profitable growth, is central to the Company’s strategy.
• Generative AI Focus: Strategic Collaboration Agreements (SCAs) with major technology players like Oracle, AWS, and Microsoft have been signed to prioritize Gen AI initiatives. The launch of ‘Canvas.ai’ and ‘Canvas CloudXperienz’ platforms are key initiatives.
• Strategic Alliances and Partnerships: Joint go-to-market (GTM) strategies, co-innovation, co-selling, and global demand generation activities with partners were executed. A joint venture with Aramco Digital was established to create a digital and IT services company in Saudi Arabia.
• Minecraft 2.0, Everest, and Neo Programs: Accelerated growth in Focus 100 accounts, facilitated large deal closures, and enabled market penetration.
• Integration Completion: The integration activities related to the merger of LTI and Mindtree have been completed.

Risk Landscape Changes #

• Leadership Attrition: Addressed through specialized leadership development programs and a robust leadership pipeline.
• Skill Building: The dynamic nature of the industry presents challenges in workforce utilization. The Company addressed this through Business-Aligned Skill Needs Assessments, a Competency Manager Network, and upskilling initiatives.
• Information Security & Compliances: Cyber security risks are being mitigated with a comprehensive cyber security strategy and adherence to global best practices.
• Data Privacy and Compliance: A global data privacy framework aligned with ISO27701 standards has been deployed, along with automation tools.
• ESG Risks: Heightened expectations from stakeholders and delayed reporting are addressed through targets for carbon and water neutrality, community development programs, and transparent disclosures.
• Revenue Headwinds: Reduced IT spending and economic uncertainty are being addressed through sales transformation programs, cross-selling, upselling, and pursuit of large deals.
• Technology Disruption: A process for regularly publishing the Technology Radar to showcase identified, selected, and evaluated technologies is implemented.
• Margin Pressures: Rising labor and operational costs, along with client pressure for discounts, are addressed through a five-pronged approach (Program ‘NorthStar’) focusing on bench & utilization, low-margin programs, delivery structure optimization, improved rate realization, and procurement cost optimization.

ESG Initiatives and Metrics #

• Environmental: Achieved a water positivity index of 2.8x, ahead of the 2030 target. 92.14% of waste was recycled. Energy consumption was 198,654 GJ. Renewable energy use was at 44.34%. Multiple initiatives were undertaken, including installation of organic waste converters, replacement of AC units with eco-friendly alternatives, and optimization of UPS capacity.
• Social: The Company had 81,650 employees, with 30.69% female employees. CSR spending was INR 807 million, impacting 598,698 beneficiaries in FY24. DEI initiatives focus on ethnicity/nationality, disability inclusion, gender equity, LGBTQ+ inclusion, and veterans support.
• Governance: The Board has a median director age of 64 years, with an average tenure of Independent Directors at 3 years, and an average attendance rate at board meetings of 98%. The Company received the Silver Award in Sustainability Reporting from the Institute of Chartered Accountants of India and was recognized as a Global Supplier Engagement Leader by CDP.
  • Received Silver award in Sustainability Reporting under the Sustainability Reporting Leadership (Service Sector) category.
  • Recognized as Global Supplier Engagement Leader for the fourth consecutive year by CDP.
  • Early adopter of Taskforce on Nature-related Financial Disclosures (TNFD).
  • Placed in the Global Leadership League in the Carbon Disclosure Project (CDP) 2023 Climate Change ranking.

Management Outlook #

• The management has pivoted its portfolio to align with current spend areas and expects to benefit from the return of discretionary spending.
• The Company anticipates leveraging the completed integration activities to take advantage of market recovery.
• The management is focused on expanding its value proposition and becoming a partner of choice for its clients.
• Medium-term growth is expected to be supported by a strong order inflow and a healthy deal pipeline.

Detailed Analysis #

Financial Position Analysis #

Balance Sheet Analysis #

3-Year Comparative Analysis of Assets, Liabilities, and Equity (Consolidated) #

(Analysis based on 2 years of data)

Significant Changes in Major Line Items (>10% YoY) #

• Non-current Assets: Increased by 38.12% , mainly due to increase in Property, plant and equipment, Right of use of Assets and increase in Investments.
• Property, Plant, and Equipment: Increased by 70.72%, primarily due to construction of premises at Kolkata, Bangalore, and Chennai.
• Right-of-Use Assets: Increased by 51.63%, reflecting new leases.
• Non-Current Investments: Increased by 177.67%.
• Other Non-Current Financial Assets: Increased by 144.59%.
• Current Assets: Increased by 9.66%.
• Current Investments: Increased by 42.42%.
• Other Bank Balances: Increased by 67.93%.
• Other Financial Assets: Increased by 44.54%
• Unbilled revenue: Decreased by 17.17%.
• Cash and Cash Equivalent: Decreased by 22.19%
• Equity: Increased by 20.64%, mainly due to increase in retained earnings.
• Non-current Liabilities: Increased by 26.81%.
• Lease Liabilities (Non-current): Increased by 45.57%.
• Other Financial Liabilities (Non-current): Decreased by 82.08%.
• Provisions (Non-current): Decreased by 55.14%.

Working Capital Trends #

• Analysis: Working capital has increased, indicating enhanced liquidity.

Asset Quality Metrics #

Provided Data on Asset Quality: Allowance for expected credit loss (ECL) as at March 31, 2024, is ₹2,365 Million, increased from ₹1,655 Million as at March 31, 2023.

• Allowance for ECL to Gross Trade Receivables:

  • As at March 31, 2024: (₹2,365 / ₹59,425) * 100 = 3.98%.
  • As at March 31, 2023: (₹1,655 / ₹57,889) * 100 = 2.86%.

• Analysis: There has been a increase in the allowance for ECL as a percentage of gross trade receivables, which indicates management considers higher credit risk and more conservative approach.

Debt Structure and Maturity Profile #

• Analysis: Lease liabilities constitute the majority of the Group’s debt. Borrowings (current) have decreased significantly, while lease liabilities have increased.

  Maturity Profile of Lease Liabilities:

• Analysis: The Group’s lease liabilities are primarily long-term, with a significant portion due within one year.

Off-Balance Sheet Items #

• Contingent Liabilities (Claims against the Group not acknowledged as debts):
  • As at March 31, 2024: ₹7,128 Million.
  • As at March 31, 2023: ₹4,184 Million.
• Guarantees:
  • The specific amount and nature of the guarantees as of March 31, 2024, are not detailed in the provided data. A guarantee was issued on behalf of a wholly-owned subsidiary, but the current outstanding amount is zero.
• Capital Commitments:
  • As at March 31, 2024:₹ 5,056 Million.
  • As at March 31, 2023:₹ 995 Million.
• Analysis: Contingent liabilities have increased significantly, primarily due to income tax and indirect tax liabilities under dispute. The capital commitments have also increased notably, indicating planned capital expenditure.

LTIMindtree Limited Financial Analysis: FY24 #

Revenue Breakdown #

By Industry (Consolidated, FY24 vs. FY23) #

• Banking, Financial Services & Insurance: Revenue grew by 2.2% to ₹128,406 million.
• Technology, Media & Communications: Revenue increased by 1.7% to ₹83,987 million.
• Manufacturing & Resources: Revenue increased significantly, at 14.6% to ₹65,875 million.
• Consumer Business: Revenue grew by 2.3% to ₹53,560 million.
• Healthcare, Life sciences & Public Services: Revenue Increased by 6.1%.
• Total Consolidated Revenue: Increased by 7.0% to ₹355,170 million.

By Geography (Consolidated, FY24 vs. FY23, USD terms) #

• North America: Revenue grew by 5.9%.
• Europe: Revenue increased by 3.5%.
• Rest of World: Revenue decreased by 3.0%.

Cost Structure Analysis #

Employee Benefits Expense (Consolidated) #

• Increased by 8.9% year-over-year to ₹227,323 million in FY24.
• As a percentage of revenue, employee benefits expense increased to 64.0% in FY24 from 62.9% in FY23.

Sub-Contracting Cost #

• Subcontracting expenses decreased by 9.5%.

Other Expenses (Consolidated) #

• Increased by 14.0% year-over-year.
• Cost of equipment, hardware, and software packages increased by 42.2%.
• Power and fuel expenses increased by 80.5%.
• Repairs and Maintenance Increased by 29.5%.
• Lease Rentals & Establishment expenses Increased by 19.1%.
• Recruitment expenses went down by 44.5%.

Margin Analysis (Consolidated, FY24 vs. FY23) #

• EBITDA Margin: Decreased to 18.0% in FY24 from 18.4% in FY23.
• EBIT Margin: Decreased to 15.7% in FY24 from 16.2% in FY23.
• Net Profit (PAT) Margin: Decreased to 12.9% in FY24 from 13.3% in FY23.

EPS Analysis (Consolidated) #

• Basic EPS: Increased to ₹154.85 in FY24 from ₹149.07 in FY23.
• Diluted EPS: Increased to ₹154.48 in FY24 from ₹148.83 in FY23.

Segment-Wise Financial Risk Analysis #

Banking, Financial Services & Insurance (BFSI) #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: LTIMindtree leverages domain and technology capabilities, focused sub-industry offerings, and a strong partner ecosystem. Investment in core modernization, sustainability, cyber-resilience, and AI, data and insight services.
• Control Effectiveness: Partially Effective.
• Potential Financial Impact: Revenue growth was only 2.2% Y-o-Y, which can be negative, and lower than other segments.

Operational Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Implementation of standardized processes. Strong delivery capabilities and project management practices.
• Control Effectiveness: Moderate.
• Potential Financial Impact: Indirect effect on client satisfaction and project profitability.

Financial Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Focus on margin and Diversification, focus on maintaining strong balance sheet.
• Control Effectiveness: Effective
• Potential Financial Impact: Limited direct impact is evident; however, risk management processes are established.

Compliance/Regulatory Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Global data privacy framework aligned with ISO27701 standards, cognitive data lake.
• Control Effectiveness: Moderate to High, based on certifications.
• Potential Financial Impact: Significant financial penalties and reputational damage from non-compliance.

Emerging Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Investments in Gen AI, Canvas.ai platform, and partnerships with major technology providers.
• Control Effectiveness: Early stage, effectiveness to be determined.
• Potential Financial Impact: Potential to reduce profitability, client retention and reputation, if not adopted.

Technology, Media & Communications #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Leverage domain, customer experience, and digital engineering. Use of cloud, data and AI. Operate To Transform framework using automation, AI and IPs.
• Control Effectiveness: Partially effective.
• Potential Financial Impact: Revenue growth was only 1.7% Y-o-Y.

Operational Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Process standardization and automation, project management
• Control Effectiveness: Moderate
• Potential Financial Impact: Indirect effect on project delivery and cost efficiency.

Financial Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Focus on strong financial planning, cost optimization, and resource allocation.
• Control Effectiveness: Effective
• Potential Financial Impact: Client reduction in discretionary spending impacts revenue and profitability.

Compliance/Regulatory Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Increasing
• Mitigation Strategies: Compliance with data protection regulations, implementation of privacy policies, regular audits.
• Control Effectiveness: High, based on policies in place.
• Potential Financial Impact: Fines and reputational damage due to data breaches or non-compliance.

Emerging Risks #

• Severity: High
• Likelihood: High
• Trend: Increasing
• Mitigation Strategies: Investment in Gen AI.
• Control Effectiveness: Early Stage.
• Potential Financial Impact. Substantial, could create an impact on revenue and the market position.

Manufacturing & Resources #

Strategic Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Micro-verticalized focus, full-service provision, implementation of data-driven enterprise, ERP modernization, CX Transformation, advance digital manufacturing and Operations Transformation..
• Control Effectiveness: Moderate, positive growth indicated.
• Potential Financial Impact: Impact on growth and competitiveness.

Operational Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing.
• Mitigation Strategies: Adoption of digital manufacturing solutions, operations transformation initiatives.
• Control Effectiveness: Moderate.
• Potential Financial Impact: Direct impact on production efficiency and costs.

Financial Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Diversification and cost management.
• Control Effectiveness: Effective
• Potential Financial Impact: Manageable based on current performance.

Compliance/Regulatory Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Increasing
• Mitigation Strategies: Implementation of sustainability and compliance monitoring solutions.
• Control Effectiveness: Moderate, ongoing monitoring required.
• Potential Financial Impact: Potential costs associated with compliance, penalties for non-compliance.

Emerging Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Investment in Gen AI, IoT, I4.0.
• Control Effectiveness: Early stages, to be determined.
• Potential Financial Impact: Potential to increase revenue by adopting technologies.

Consumer Business #

Strategic Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing.
• Mitigation Strategies: Focus on hyper-personalized experiences, “Phygital” experiences, cloud adoption.
• Control Effectiveness: Partially effective.
• Potential Financial Impact. Lower Growth rates can impact.

Operational Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Process automation, supply chain optimization.
• Control Effectiveness: Moderate
• Potential Financial Impact: Direct impact on cost efficiency and customer service levels.

Financial Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Strong financial controls, diversification of offerings.
• Control Effectiveness: Effective
• Potential Financial Impact: Moderate impact from margin pressures.

Compliance/Regulatory Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Focus on data privacy and security, compliance with ESG standards.
• Control Effectiveness: Moderate
• Potential Financial Impact: Reputational damage and financial penalties.

Emerging Risks #

• Severity: High
• Likelihood: High
• Trend: Increasing
• Mitigation Strategies: Investment and adoption of data to decision and Gen AI technologies.
• Control Effectiveness: Early Stage.
• Potential Financial Impact: Significant impact on revenue and customer experience.

Healthcare, Life Sciences & Public Services #

Strategic Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Focus on healthcare platform operation approach, adoption of new technologies.
• Control Effectiveness: Moderate
• Potential Financial Impact: Impact on growth and competitiveness.

Operational Risks #

• Severity: Medium
• Likelihood: Medium
• Trend: Stable
• Mitigation Strategies: Optimization of healthcare value chain, use of digital, cloud, and data technologies.
• Control Effectiveness: Moderate.
• Potential Financial Impact: Direct impact on cost of care, health outcomes, and patient/clinical experience.

Financial Risks #

• Severity: Medium
• Likelihood: Low
• Trend: Stable
• Mitigation Strategies: Strong financial planning and cost management.
• Control Effectiveness: Effective
• Potential Financial Impact: Moderate impact from funding constraints and pricing pressures.

Compliance/Regulatory Risks #

• Severity: High
• Likelihood: Medium
• Trend: Increasing
• Mitigation Strategies: Compliance with healthcare regulations, data security measures.
• Control Effectiveness: Moderate to High, with ongoing efforts.
• Potential Financial Impact: Significant penalties and reputational damage.

Emerging Risks #

• Severity: High
• Likelihood: High
• Trend: Increasing
• Mitigation Strategies: Investment in Gen AI and data analytics.
• Control Effectiveness: Early stage
• Potential Financial Impact: Substantial, could impact cost reduction and improved healthcare outcomes.

Strategic and Management Analysis #

Long-Term Strategic Goals and Progress #

• The Group is focused on achieving its long-term goal of becoming a USD 10 Billion Company by transitioning to S4HANA on RISE.
• Net-zero emissions by 2040 and water positive by 2030, with the Group being 2.8x water positive ahead of its 2030 target.
• The Group is committed to running operations with 85%+ renewable energy by 2030.
• The Group has targeted to increase the percentage of women in the workforce to 40%, with 15% in leadership roles by 2030.

Competitive Advantages and Market Positioning #

• LTIMindtree is positioned as a strategic partner for digital transformation, leveraging its extensive domain and technology expertise.
• The Company is building unified capabilities, force-multiplying impact with partners, and leveraging its IP for non-linear outcomes.
• The merger of LTI and Mindtree has created opportunities for cross-selling, enhancing purchasing power, and driving operational excellence.
• LTIMindtree has a global reach, expanding delivery presence in countries like Canada, Mexico, and China.
• The Company has been included in the NIFTY 50 index.
• Ranked #2 in overall customer satisfaction in Whitelane Research’s 2023 IT Sourcing Study for Germany.

Innovation Initiatives and R&D Effectiveness #

• LTIMindtree has launched ‘Enterprise AI’ Service Line, ‘Canvas.ai’, and ‘Canvas CloudXperienz’ platforms to provide cutting-edge solutions.
• Subsidiaries like Syncordis and Nielsen+Partner were integrated to enhance banking and capital market offerings.
• Strategic Collaboration Agreements (SCAs) with major global partners like Oracle, AWS, and Microsoft for Gen AI initiatives.
• Pioneering an industry-first partner ‘Power of Partnerships (PoP) framework’.
• LTIMindtree is investing and innovating in emerging technology such as Generative AI.

M&A Strategy and Execution #

• The merger of LTI and Mindtree has been completed, with integration activities increasing scale, talent, and capabilities.
• Subsidiaries like Syncordis and Nielsen+Partner have been integrated to form a banking transformation practice.
• A joint venture with Aramco Digital has been established to create a digital and IT services company in Saudi Arabia.

Management’s Track Record in Execution #

• The management successfully completed the integration of LTI and Mindtree, including systems, processes, and people.
• The Company reported a strong order inflow of USD 5.64 billion, a 15.7% increase over FY23.
• The management has achieved operational excellence by simplifying internal processes and IT systems.
• Strong client advocacy and an increase brand recall has been achieved.

Capital Allocation Strategy #

• The Company maintains a capital allocation framework to support rapid growth.
• Reinvestment of savings from operational optimization into broadening outreach and expanding delivery presence.
• Strong cash flow metrics, crossing INR 10,000 crore in cash and investment balance.
• The Company is committed to shareholder’s value creation and maximizing return to investors.

Organizational Changes and Their Impact #

• The merger of LTI and Mindtree has resulted in a combined entity with enhanced capabilities and scale.
• The integration of systems and processes has led to increased operational efficiency.
• A standardized taxonomy framework and unified skill currency have been created across the talent supply chain.
• The Workforce Management (WFM) function has been integrated across units, driving greater fungibility of skills.
• Expansion of delivery presence in nearshore countries like Canada, Mexico, and China has been done.

ESG Framework: LTIMindtree Analysis #

Environmental Metrics and Targets #

• Aims for net-zero emissions by 2040 and 85%+ renewable energy use by 2030.
• Energy consumption for FY24 was 198,654 GJ.
• Renewable energy sources met 44.34% of the total energy requirement.
• Water consumption for FY24 stood at 333.724 ML.
• Achieved a water positivity index of 2.8x, ahead of 2030 target.
• Waste recycled for FY24 equaled 92.14%.
• Four Bengaluru facilities are certified for Zero Waste to Landfill.
• Replaced R22 gas units with ecofriendly refrigerant units in some facilities, with projected cost and energy savings.
• LED lamps are used for lighting in entire floor with 30% reduction of light power.

Social Responsibility Programs #

• CSR expenditure for FY24 was ₹807 Million.
• CSR beneficiaries for FY24 numbered 598,698, with a cumulative total of 1,598,698 since FY19.
• CSR projects included education, empowerment, health and nutrition, and environment.
  • Digital and STEM skills for 273,803 students.
  • Vocational skills training for 2,298 marginalized individuals.
  • Tree planting across 12,000 acres.
• A total of 21 projects with 57 NGO partners.

Governance Structure and Effectiveness #

• Board of Directors has oversight responsibility, with specialized committees.
• The Board has a diverse skill set matrix.
• Board composition included 3 executive directors, 3 non-executive directors, and 6 independent directors as of March 31, 2024.
• Average attendance at Board meetings was 98%.

Sustainability Investments and Return on Investment (ROI) #

• FY24 saw an environmental capex spend of INR 5,058,480.
• Investments in green buildings totaled ₹3,081.5 Million.
• ₹821 Million invested in employees’ learning and development.
• Cost savings from energy efficiency initiatives (UPS optimization, EC fans) indicate a financial return on certain sustainability investments.

ESG Ratings and Peer Comparison #

• Participated in CDP, S&P Global Corporate Sustainability Assessment, MSCI, FTSE Russell, Sustainalytics, and other ESG indices.
• Included in the CDP Global Leadership League and was a CDP Supplier Engagement Leader for the fourth consecutive year.
• Early adopter of Taskforce on Nature-related Financial Disclosures (TNFD).
• Ranked in the top 25 of the Travel Smart 2024 rankings for sustainable business travel.
• Scored in the upper quadrant (79.3 out of 100) of top 200 Indian companies (by market cap) in the ESG ratings index by Stakeholder Empowerment Services.

Regulatory Compliance and Future Preparations #

• Reports 100% compliance with applicable regulations.
• Maintains a global data privacy framework aligned with ISO27701 standards.
• A Whistleblower Policy and Prevention of Sexual Harassment (POSH) Policy are in place.
• Prepares Business Responsibility and Sustainability Report and publishes an Integrated Annual Report.

Future Projections and Guidance #

Banking, Financial Services & Insurance (BFSI) #

Management Guidance and Assumptions #

Management implicitly assumes continued demand for digital transformation services, core modernization, and engagement with end consumers within the BFSI sector.

Market Growth Forecasts #

Revenue increased from 122,494 in FY23 to 128,406 in FY24.

Planned Strategic Initiatives #

Full-spectrum service offerings, with a focus on leveraging AI, data, insights, and cyber-resilience. Continued development of end-to-end transformation capabilities, including core modernization and reimagining go-to-market models.

Efficiency Improvement Targets #

Focus on achieving sustainability goals and better customer engagement.

Potential Challenges and Opportunities #

The segment is undergoing a rapid pace of change and faces rapid pace of change as an opportunity.

Technology, Media & Communications #

Management Guidance and Assumptions #

Management anticipates continued demand for product innovation, content supply chain modernization, and personalized viewer experiences, particularly within streaming platforms.

Market Growth Forecasts #

Revenue increased from 80,661 in FY23 to 83,987 in FY24.

Planned Strategic Initiatives #

Focused on enabling media and entertainment clients to monetize investments, optimize cost structures, drive new revenue streams, and personalize viewer experiences, leveraging the ‘Mediacube’ platform. For the communications industry, accelerating new product launches.

Efficiency Improvement Targets #

Improvement of manufacturing efficiency and productivity. Enabling market growth through connected solutions.

Potential Challenges and Opportunities #

Monetization challenges for streaming platforms and optimization of cost structures. Driving new revenue streams and personalizing viewer experiences.

Manufacturing & Resources #

Management Guidance and Assumptions #

Assumes continued demand for digital core and experience capabilities driven by parent L&T Group’s heritage. Focuses on serving customer priorities across front office and back-office functions.

Market Growth Forecasts #

Revenue rose from 56,110 in FY23 to 65,875 in FY24.

Planned Strategic Initiatives #

Full-service provision, excelling in data-driven enterprises, ERP modernization, CX transformation, advanced digital manufacturing, and operations transformation. Micro-verticalized focus across various industries.

Efficiency Improvement Targets #

Streamlined supply chains and transformed field services

Potential Challenges and Opportunities #

Priorities across the manufacturing value chain & across the front and back office.

Consumer Business #

Management Guidance and Assumptions #

Assumes ongoing demand for hyper-personalized experiences at scale across consumer journeys, with a need for end-to-end, data-driven personalization.

Market Growth Forecasts #

Revenue increased from 51,123 in FY23 to 53,560 in FY24.

Planned Strategic Initiatives #

Designing new ‘Phygital’ experiences, modernizing legacy applications and infrastructure, leveraging cloud technologies, and automating data-to-decision processes.

Efficiency Improvement Targets #

Automation and reduction in time to decision.

Potential Challenges and Opportunities #

Competition and margin pressures from online retailers, ever-changing consumer behavior, rising costs, supply chain disruptions, and ESG issues.

Healthcare, Life Sciences & Public Services #

Management Guidance and Assumptions #

Assumes demand for transformative consulting services and technology solutions across various segments within healthcare, including payers, providers, and manufacturers.

Market Growth Forecasts #

Revenue increased from 21,442 in FY23 to 23,342 in FY24.

Planned Strategic Initiatives #

Focus on optimizing the healthcare value chain, creating engaging experiences, and adopting new processes and technologies. Key objectives include reducing the cost of care, improving health outcomes, and enhancing patient and clinical experiences.

Efficiency Improvement Targets #

Reduction of the cost of care, improve health outcomes and improve patients and clinical experience.

Potential Challenges and Opportunities #

Optimizing every aspect of the healthcare value chain. Challenges of the past and explorations of a limitless future.

General/Cross-Segment Observations #

• Strategic Collaboration Agreements (SCAs): LTIMindtree is actively pursuing SCAs with major technology players (Oracle, AWS, Microsoft) to drive prioritized initiatives, particularly in Gen AI.
• Partner Ecosystem: Leveraging a strong partner ecosystem is a key element of LTIMindtree’s strategy, enabling co-innovation, co-selling, and global demand generation.
• Merger Synergies: The merger of LTI and Mindtree is positioned as a driver of growth and efficiency.
• Cost Optimisation: Reduction of discretionary spending.

Audit and Regulatory Analysis of LTIMindtree Limited #

Auditor’s Opinion and Qualifications #

• The Independent Auditor’s Report issued by Deloitte Haskins & Sells LLP provided an unmodified opinion on the standalone and consolidated financial statements.
• No qualifications, observations, comments, or remarks with an adverse effect on the Company’s functioning were reported.
• No fraud reporting was made by the Statutory Auditor under Section 143(12) of the Act.

Key Accounting Policies and Changes #

• The financial statements are prepared under the historical cost convention on accrual basis, complying with Ind AS.
• Accounting policies were consistently applied, except where new standards or revisions required changes.
• The previously published financial statements of the Company have been restated to comply with Ind AS 103 Appendix C for Business combinations of entities under common control.

Internal Control Effectiveness #

• The Company maintains an adequate internal financial control system.
• The Audit Committee and the Board believe that the Company has a sound Internal Financial Control system, and it operates effectively.
• No material weakness was reported during FY24.
• The Auditor’s separate report (‘Annexure A’ to the Independent Auditor’s Report) expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls.

Regulatory Compliance Status #

• The Company is in compliance with Secretarial Standards SS-1 and SS-2.
• Recommendations made by the Board Committees to the Board of Directors were accepted.
• The Company complied with the requirements under Regulations 17 to 27 and clause (b) to (i) of sub-regulation (2) of Regulation 46 of the SEBI Listing Regulations.
• The Company maintained compliance management framework and monitors regulatory compliance.

Legal Proceedings and Potential Impact #

• A class action lawsuit filed in the US alleging discrimination was settled, with a preliminary fairness order approved by the court.
• The Company has challenged an ‘Intimation of liability’ of ₹ 48,310 million under Section 74 of the Karnataka Goods and Services Tax Act, 2017, with an interim stay granted by the High Court of Karnataka.
• The Company received demand order from Maharashtra GST authorities (₹ 2,059 million) and Show Cause notice from Karnataka GST authorities (₹ 7,269 million). The Company has taken appropriate steps of appeal and writ petition.
• The Company expects favorable outcomes and does not anticipate material financial impact from these legal proceedings, based on assessment and legal counsel.

Related Party Transactions #

• All related party transactions during FY24 were in the ordinary course of business and on arm’s length terms.
• The Audit Committee reviewed related party transactions on a quarterly basis.
• There were no material related party transactions requiring shareholder approval during FY24.
• Disclosures of related party transactions are made in the notes to the financial statements.

Subsequent Events #

• The Board of Directors recommended a final dividend of ₹ 45/- per equity share on April 24, 2024.

Analysis of Accounting Quality and Regulatory Risk Assessment #

• Accounting Quality: Consistent application of accounting policies, compliance with Ind AS, and an unmodified auditor’s opinion indicate high accounting quality. The use of estimates and judgements is standard, and their regular review supports accuracy and reliability.
• Regulatory Risk: LTIMindtree demonstrates strong governance and compliance with the Companies Act, SEBI Listing Regulations, and other relevant regulations. There were no instances of non-compliance or penalties imposed by regulatory authorities during the last three years. The Company’s proactive management of legal disputes and established Whistleblower mechanism further mitigates regulatory risks. The Company is also demonstrating its preparation for the future, including a robust risk management, and has an established cyber security with relevant policies and procedures.