LTIMindtree Profit Falls 10.5% on Rs 590 Cr Labour Cost

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AuthorIshaan Verma|Published at:
LTIMindtree Profit Falls 10.5% on Rs 590 Cr Labour Cost
Overview

LTIMindtree reported a 10.58% year-on-year drop in net profit for Q3FY26, totaling ₹970.6 crore. The decline was attributed to a ₹590.3 crore one-time expense from new labour code implementations. Excluding this, adjusted profit surged 29% YoY. The IT firm secured $1.69 billion in order inflows and saw operating margins improve to 16.1%.

LTIMindtree's net profit for the third quarter of FY26 registered a 10.58% year-on-year decline, falling to ₹970.6 crore from ₹1,085.4 crore in the prior year's period. This downturn was primarily driven by a significant one-time expense of ₹590.3 crore incurred due to the implementation of new labour codes. This cost recognition, related to past service obligations, impacted the quarter and the nine months ending December 31, 2025.

Adjusted Profit Soars

Excluding the one-time impact of the labour code implementation, LTIMindtree's adjusted net profit showed robust growth. It stood at ₹1,401.3 crore, marking a substantial 29% increase year-on-year and a 1.5% rise sequentially. This adjusted figure better reflects the underlying operational performance of the company.

Strong Order Inflows and AI Focus

The company reported significant order inflows totaling $1.69 billion in Q3 FY26. This included a notable $155 million, five-year contract with a US-based insurance and financial services firm. Several new business wins were bolstered by AI-led transformation, cloud computing, cybersecurity, and data analytics projects across various industries.

Employee Growth and Attrition Decline

LTIMindtree's employee base expanded to 87,958 at the end of the quarter, with a net addition of 1,511 professionals. A positive trend was observed in attrition, which improved to 13.8% on a trailing twelve-month basis. Employee utilization, excluding trainees, was reported at a healthy 86.9%.

Margin Expansion

The firm's operating EBIT margin improved to 16.1% for the quarter. This represents an expansion of 20 basis points sequentially and a significant 230 basis points year-on-year. Operating EBIT rose 30.7% year-on-year to ₹17,371 million.

Strategic AI Pivot Drives Momentum

LTIMindtree Chief Executive Officer and Managing Director, Venu Lambu, highlighted the company's strategic AI pivot as a key driver of its performance. "Our strong Q3FY26 performance reflects the impact of our strategic AI pivot, continued success in large deals, and operational excellence," Lambu stated. He added that the company's disciplined execution and differentiated AI-led offerings are contributing to profitable growth and client outcomes.

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