Target Price: Rs6350
* LTI's Q4 operating performance came in below our estimates. Revenues grew by 3.1% QoQ to USD570.4mn (3.6% CC), missing estimates partly due to onsite supply challenges. EBITM declined 60bps to 17.3%, below our estimates.
* Revenue growth was broad-based, driven by CPG, Retail & Pharma (7.7& QoQ CC), E&U (4.1%), Insurance (3.8%), BFS (3.3%), Others (3.3%), Manufacturing (2.3%) and Hi-Tech, M&E (2.2%). All geographies, except RoW, reported positive sequential growth.
* LTI is confident of delivering a top-quartile revenue performance in FY23 on strong broad-based demand, large deal intake and pipeline, conversations with clients, and good progress on client mining. It signed 4 large deals with net new TCV over USD80mn in Q4.
* We cut our FY23/FY24 EPS estimates by 3.7%/2.5%, factoring in the Q4 performance miss and softness in onsite volume in H1. We maintain Hold with a TP of Rs6,350 (Rs6,500 earlier) at 34x Mar'24E EPS.