India’s LTIMindtree posts quarterly profit fall on labour code charges

BENGALURU: India’s LTIMindtree reported an 8.3% fall in third-quarter profit on Monday, hit by a one-off impact from newly enacted labour codes.

Net profit at the country’s sixth-largest IT firm fell to 9.71 billion rupees ($106.76 million) in the three months ended December 31, mainly on account of charges of about 5.9 billion rupees linked to new labour regulations.

Implemented in November, the new codes - India’s biggest overhaul of workers’ laws in decades - have dragged the profit of firms in India’s manpower-heavy IT sector, including that of Wipro, TCS and HCLTech.

LTIMindtree’s revenue rose 11.6% to 107.81 billion rupees, in line with estimates of 107.31 billion.

Its total order bookings stood at a record $1.69 billion, surpassing the year ago quarter’s $1.68 billion. Reuters had reported that the company won its largest-ever deal , pegged at $580 million, in October.

“The numbers look good in terms of margins, revenue and hiring as well. The company has managed weakness from top-5 clients from growing in other areas and rest of the clients,” said Karan Uppal, lead analyst at Phillip Capital.

Revenue in the banking, financial services and insurance (BFSI) sector, which accounts for about one-third of its overall revenue, grew 2.3%.

Its consumer unit rose 14.6%, the most among the five business segments.

Last week, larger rival Infosys signaled a healthy demand outlook, especially in the core financial services segment.