Dear Shareholders,

It gives us great pleasure to share our first annual message as part of the leadership of LTIMindtree Limited. We are proud to have entered the elite league of top-tiered IT services companies by merging erstwhile Larsen & Toubro Infotech Limited and erstwhile Mindtree Limited in a record time. This has expanded our opportunity for growth significantly, and we are committed to helping businesses reimagine outcomes and unlock new possibilities by placing the most optimal intelligence, insights, innovation, and investments at the core of value.

We are already seeing promising indications that the merger rationale has started to materialize as expected. With our broadened and well-diversified offerings and combination of engineering and experience DNAs, we are well-positioned to help enterprises accomplish the dual objectives of digital transformation that comprize driving revenue growth and cost efficiencies. Our unified capabilities, continued investments in partnerships, and best-in-class IPs will contribute to our growth leadership and bring in revenue synergies of USD 1 Billion.

LTIMOne

We are a one-market organization, and our unified capability helps us deliver a compelling integrated proposition to our clients. Our end-to-end services portfolio, strong sales engine, and proven account mining positions us well to continue delivering industry-leading revenue growth for FY24. The Company’s strategic approach is guided by the LTIMOne framework, which focuses on unifying the organization and providing clarity to clients, employees, and stakeholders. The framework encompasses one culture, one GTM (Go-To-Market) strategy, one unified capability, and one profitable growth model. Through these pillars, LTIMindtree aims to simplify operations, deliver impactful outcomes, and drive profitable growth for clients and the communities it operates in.

By enabling our clients to swiftly adapt to changes in the market, technology, and customer expectations, and compete better with digital natives by bringing their operations in sync with their technology ambitions, we aim to get them to the future, faster.

Year in retrospective into: – Sustaining momentum through innovation and determination

The last year was marked by a great deal of uncertainty due to multiple global events – from high inflation to specific banking crises. Despite this, we have steadily moved ahead and stayed on track with our order inflow for the full year being USD 4.87 Billion. Superior execution and meeting our client commitments continue to be our strengths, and we remain committed to maintaining a laser-sharp focus on this aspect of our business. We recently completed our unified CSAT survey and received a very positive response for our robust delivery and combined capabilities.

Through our extensive client interactions post-merger, we have learned that our clients are increasingly looking to break down silos and adopt a unified approach to digital transformation. Our end-to-end capabilities will enable us to meet this need and position us favorably as their chosen transformation partner. Our new Service Line organization is designed to meet this latent need of our clients, and our recent wins demonstrate that we are on the right path. Also, we are now one of the first in the industry to provide a Generative AI-based platform to create safe, secure, and responsible co-pilot solutions. This will enable several new use cases for our enterprise clients.

As a partner committed to creating long-term value in these journeys, we bring scale and expertise, assets of innovation, and platform-led delivery to our clients. We have the energy and ambition of a challenger, combined with the resources, scale, and confidence of a leader. Our attention and responsiveness as a caring partner, combined with the vision and perspective of an end-to-end provider, help our clients thrive in the ever-evolving business landscape and get to the future, faster. We continue to expand our market share in collaboration with hyperscalers, enterprise solutions, SaaS platforms, and product companies.

To help organizations navigate uncertainties and disruption and deliver growth at all times, we have created four sales transformation programs – Minecraft 2.0, Aspire, Everest, and Neo. These programs focus on growth opportunities unique to LTIMindtree, including, but not limited to, a resilient blue chip account portfolio, a large base of accounts for cross-sell and upsell, alliances and partnership-led growth, a robust pipeline including several large deals, and new logos.

Future of work

Our 84,000+ talented professionals form a diverse pool, and the talent synergies brought about by the merger maximize our potential and future opportunities. We have adopted a Yin Yang model as the future way of work, which offers our employees the perfect blend of work-from-office and work-from-home worlds, enabling them to manage their work-life balance better. By leveraging automation and digitization in our workflows, we continue to provide our employees with a superior work experience, thereby improving productivity and optimizing efficiencies. We launched ‘ULTIMA,’ a state-of-the-art unified platform, as part of our integration efforts to promote insights, connections, and collaborations across the Company.

Financial highlights

We are delighted to present LTIMindtree’s high growth performance with revenues at USD 4.1 Billion, up 19.9% in constant currency and 17.2% in USD terms, and INR revenue stood at INR 331,830 Million, up 27.1%. Our EBITDA margin stood at 18.4% for FY23 compared to 20.1% for FY22. Our EBIT margin stood at 16.2% for FY23 compared to 17.8% for FY22. The net profit grew at 11.7% from INR 39,500 Million for FY22 to INR 44,103 Million for FY23. The PAT margin was 13.3% for FY23 against 15.1% for FY22. If not for one-off impact of merger-related integration cost, our EBIT margin and PAT margin would have been approximately higher to the tune of 40 and 30 basis points, respectively.

We remain committed to enhancing shareholders value and maximising returns to our investors. The Return on Equity (ROE) stood at 28.6% against 30.5% for FY22. The Return on Capital Employed (ROCE) stood at 34.9% against 37.7% for FY22. Our Basic Earnings Per Share increased by 11.5% from INR 133.67 in FY22 to INR 149.07 in FY23. Overall dividend paid to equity shareholders increased from INR 13,277 Million for FY22 to INR 15,627 Million for FY23. Our operating cashflow conversion was healthy and stood at 70.2% and our current ratio improved from 2.9 as on March 31, 2022 to 3.1 as on March 31, 2023.

We remain focused on maintaining a stable and secure financial foundation, and our strong liquidity position reflects our prudent financial management. Our Days Sales Outstanding (DSO) on trade receivables has improved to 60 days as on March 31, 2023 from 62 days as on March 31, 2022, amidst increase in business owing to better cashflow management of receivables. Our cash and investment balances stood at INR 83,903 Million as at March 31, 2023 against INR 79,176 Million as at March 31, 2022.

We were assigned AAA/Stable/A1+ by CRISIL Ratings and IND AAA/Stable/IND A1+ by India Ratings & Research, an outcome of expected sustenance of profitable business performance, healthy deal pipeline, diversified service offerings, financial discipline, responsible risk management and continuous investment in business towards long-term sustainable value creation.

Good governance

At LTIMindtree, we strive to uphold the principles of good governance, integrity, and transparency in everything we do. These values guide our fair and inclusive decision-making procedure. We implement best practices for integrated reporting, embed integrated reporting in our strategic decision-making, and provide our stakeholders with a more comprehensive and holistic view of our company’s performance, risks, and opportunities. We were among the early voluntary adopters of Business Responsibility and Sustainability Reporting (BRSR) for FY22. Our focus is on sustainable business growth that positively impacts society, and we have made significant strides in the area of sustainability, earning credits for our efforts. Here’s an account of our prestigious recognitions:

• Silver Shield Award for Excellence in Integrated Reporting for FY22 in the Service Sector category for the second time in a row. The award was received during the ‘ICAI Sustainability Reporting Awards 2021-22’ function hosted by The Institute of Chartered Accountants of India (ICAI).
• Accolades and honor from the Sustainability Reporting Standards Board of ICAI for facilitating the SEBI-ICAI Business Responsibility and Sustainability Reporting Back-Testing initiative during FY23.
• Received Best Annual Report Award for FY22 amongst companies in the ITES sector from The Free Press Journal and Grant Thornton.
• Won the prestigious Golden Peacock Award for 2022 for excellence in Risk Management.
• Won the CNBC TV18 India Risk Management Awards 2023 in IT-ITeS segment.
• Won Triple A Awards 2023 towards Best Supply Chain Solution in India from ‘The Asset’.

Outlook

Our virtuous cycle of sustainable value creation encompasses driving industry leading consistent profitable growth, cost synergies and disciplined execution of our strategy, our focused and value-enhancing investments to grow and expand and delivering on bold ESG agenda with shared and responsible growth.

Our unique position as LTIMindtree provides us opportunities to bend the cost curve through various levers, steer efficiencies in operational transformation and drive incremental revenue with less impact on SG&A cost. This coupled with cross sell / up sell opportunities will lead to an uptick in EBIT margin by 200 basis point over the next 4 years from the historical 17-18% range. With accelerating growth, we continue to invest in innovation, new growth engines and platform-led delivery and invest to expand through organic and inorganic growth to get access to new capabilities and geographies. We remain committed to continue delivering historical returns to shareholders and aim to achieve ROCE > 40% and create shared value to all our stakeholders.

Regards