Sanjay Jalona, MD & CEO, said, "We are still optimistic with the momentum that we see for the second half of this year."
Larsen & Toubro Infotech’s second-quarter earnings were in-line with estimates. Revenue growth slowed down due to a budget cut at top clients while BFSI growth was flat. Sanjay Jalona, MD & CEO, said, "We are still optimistic with the momentum that we see for the second half of this year and we are positive that we will be able to go into double digits. I think that will be a satisfactory performance given that we had struggle in Q1-Q2 because of a few accounts.”
Talking about wage hike and margins, Jalona said, “We had a 50 bps down in our EBIT and the wage hike is on July 1st, so the entire quarter hit comes in here, which was around 160 bps. We had advantages of visa expenses not being there and some optimization and levers that we could use. So we were able to recover everything but 50 bps and the net margin came at 14 percent which is just down 30 bps.”
On global headwind front, he said, “There is obviously a bit of nervousness in the market place and when IMF announces that the growth for global economy is probably going to come down to 3 percent from 3.8 percent, there is a sense of nervousness which comes into the industry.”
In times to come, Jalona said, “We need to see how the industry and the market react to it. Yes, there is a nervousness in the market but if you have ideas customers always finds money as well. So we continue to see excitement, pipeline but yes there is a nervousness so I don't know how to describe this better than that.”
About budget cut, he said, “We are not seeing any delays, it's business as usual. It depends on how strong and what conviction you have in terms of putting up the business case and the benefits using these digital technologies to drive change for your customers.”