LTI Mindtree Posts Strong Q2 FY26 Results, Boosted by AI Initiatives and Positive Outlook

Research Reports

29th October 2025, 6:15 AM

LTI Mindtree Posts Strong Q2 FY26 Results, Boosted by AI Initiatives and Positive Outlook

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Stocks Mentioned :

LTI Mindtree Limited

Short Description :

LTI Mindtree reported a strong performance in Q2 FY26, with revenue growing 2.3% sequentially to $1.18 billion. All business verticals and geographies showed positive growth. Despite a temporary dip in its top 5 accounts due to passing on AI-driven productivity gains, the company saw significant margin improvement. Key initiatives include launching 'Blueverse Studios' as AI collaboration hubs and extensive employee GenAI training, positioning LTI Mindtree for future growth.

Detailed Coverage :

LTI Mindtree announced robust financial results for the second quarter of Fiscal Year 2026 (Q2 FY26), reporting a sequential revenue growth of 2.3 percent in reported currency and 2.4 percent in Constant Currency, reaching $1.18 billion. This marks the second consecutive quarter with growth across all business verticals and geographies, with Healthcare, Life Sciences & Public Services leading the performance.

While the overall business is strong, the company experienced a decline of 6.7% year-on-year and 5.2% sequentially in its top 5 accounts. This is attributed to LTI Mindtree passing on AI-driven productivity gains to clients during contract renewals, a temporary phase expected to normalize. The company is actively investing in Artificial Intelligence, launching 'Blueverse Studios' in Mumbai and London as AI collaboration hubs for clients and completing GenAI Foundation training for 80,000 employees.

EBIT margins saw a sharp increase of 160 basis points quarter-on-quarter, reaching 15.9%, driven by cost optimization programs, the non-recurrence of visa costs, and favorable forex movements. The management is confident in sustaining this margin improvement through AI gains, pyramid optimization, and cost discipline. Order book bookings remained strong, with Total Contract Value (TCV) at $1.59 billion, up 22.3% year-on-year. LTI Mindtree expects stronger performance in the second half of FY26 and anticipates double-digit USD revenue growth. The company is recommended for investment on dips due to its strong earnings trajectory and AI capabilities.

Impact: This news is highly significant for LTI Mindtree's investors and the Indian IT sector. The strong results, margin improvements, and strategic AI investments indicate positive future prospects, potentially boosting the company's stock and influencing investor sentiment towards other IT firms. Rating: 8/10

Difficult Terms: EBIT margin: Earnings Before Interest and Taxes margin, a measure of a company's profitability from its core operations. Basis points (bps): A unit equal to 1/100th of 1% (0.01%). Veritcals: Specific industry segments or business lines a company operates in. Geographies: Specific countries or regions where a company operates. Sequential growth: Growth compared to the immediately preceding period (e.g., quarter-over-quarter). Year-on-year (YoY): Growth compared to the same period in the previous year. Total Contract Value (TCV): The total value of a contract signed between a company and its client over its entire duration. GenAI: Generative Artificial Intelligence, a type of AI that can create new content like text, images, or code. Pyramid optimization: Structuring the workforce with a base of more junior/fresher employees and a smaller number of senior/experienced employees to manage costs.