LTM (LTM IN) – Q4FY26 Result Update – Navigating growth after top clients reset – Downgrade to ‘HOLD’
Published on 24 Apr 2026
The revenue growth (+1.2% QoQ CC) was in-line with our estimates, ex-BFS the growth was broad-based across verticals. The weakness in BFS vertical was attributed to productivity pass-back to one of its marquee clients. The management expects the productivity benefits are largely concluded in Q4, while it anticipates the recovery to be much slower as it progresses through FY27. The timely ramp of earlier wins and recovery within Hi-Tech client should support growth within BFS and CMT verticals in FY27E. The recent India-led NN deal (CBDT) are seeing some deferrals around hardware procurement activities before it gets executed, hence it is less likely to contribute to FY27E revenue growth. The management expects softness in a couple of quarters due to tight discretionary spends and escalating geo-political conflicts, although AI related investments have upward bias. On margins, it fairly exceeded our estimates due to internal margin program (fit-for-future) and INR depreciation in Q4. We are trimming our CC revenue growth by 100bps each to 7.0%/8.0% YoY in FY27E/FY28E, while keeping our margins estimates largely unchanged. With that our EPS sees a downgrade of ~3-4% each in FY27E/FY28E. We assign 20x PE (22x earlier) to FY28E EPS for a TP of 4,560, Downgrade to HOLD (BUY earlier).
