LTIMindtree to Hike Wages in Q4, Capping Margin Impact

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AuthorIshaan Verma|Published at:
LTIMindtree to Hike Wages in Q4, Capping Margin Impact
Overview

IT giant LTIMindtree is initiating its annual wage increase cycle in the fourth quarter of fiscal year 2026. The increments will be strategically phased over two quarters, aiming to mitigate the direct impact on operating margins. This move follows a roadmap to manage industry fluctuations and maintain financial stability.

Phased Increments for Margin Management

The company plans to roll out these salary adjustments to about half of its workforce in the initial phase. This staggered approach was foreshadowed in the previous quarter, with CEO Venu Lambu describing it as a new strategy to navigate evolving industry conditions.

Chief Financial Officer Vipul Chandra detailed that the wage hikes will commence in Q4 FY26. Instead of a single implementation, the increments will be spread across Q4 FY26 and Q1 FY27. This phased strategy is designed to manage the pressure on operating margins, with an estimated impact of approximately 1% in each of these two quarters.

Offsetting Costs and Workforce Dynamics

LTIMindtree intends to offset the financial impact of these wage increases through enhanced operational efficiencies and its ongoing enterprise-wide programme, "New Horizon." This proactive measure aims to preserve profitability amidst rising employee costs.

As of December 31, 2025, LTIMindtree's total headcount was 87,958. The company added 1,511 employees in the third quarter, alongside onboarding 1,736 freshers. The 12-month attrition rate moderated to 13.8%, down from 14.2% in the previous quarter, indicating improved employee retention.

Q3 Financial Performance and Outlook

The company recently reported its third-quarter results for FY26. Consolidated net profit saw a 10.5% decline to ₹970.6 crore. This decrease was significantly influenced by a one-time provision of ₹590 crore related to the implementation of new government Labour Codes in November 2025. Revenue from operations, however, demonstrated resilience, growing 11.6% to ₹10,781 crore compared to the prior year's quarter.

CEO Venu Lambu expressed confidence in the company's growth trajectory, projecting a return to double-digit year-on-year growth as the current fiscal year concludes.

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