LTIMindtree Ltd (NSE: LTIM) Q1 2026 Earnings Call dated Jul. 17, 2025
Corporate Participants:
Vikas Jadhav — Investor Relations
Venu Lambu — Chief Executive Officer and Managing Director
Vipul Chandra — Chief Financial Officer
Nachiket Deshpande — President of Global AI Services, Strategic Deals and Partnerships
Analysts:
Sulabh Govila — Analyst
Manik Taneja — Analyst
Sandeep Shah — Analyst
Surendra Goyal — Analyst
Ravi Menon — Analyst
Rahul Jain — Analyst
Nitin Padmanabhan — Analyst
Dipesh Mehta — Analyst
Rishi Jhunjhnuwala — Analyst
Debashish Mazumdar — Analyst
Sumeet Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the LTIMindree Limited Q1 FY ’26 Earnings Call. Please note, all participants are currently in listen-only mode. There will be an opportunity to ask questions following the conclusion of the management’s opening remarks. Please note that this conference is being recorded.
I now hand over the conference to Mr. Vikas Jadhav, Investor Relations at LTIMindree. Over to you, sir.
Vikas Jadhav — Investor Relations
Thanks, Inba. Good day, everyone, and welcome to LTIMindree’s Q1 FY ’26 earnings conference call. Today, we have with us on the call Mr. Venu Lambu, Chief Executive Officer and Managing Director; Mr. Nachiket Deshpande, President, Global AI Services, Strategic Deals and Partnerships; Mr. Vipul Chandra, our Chief Financial Officer. We’ll begin with a brief overview of the company’s Q1 FY ’26 performance, after which we’ll open the floor for Q&A.
During the call, we could make forward-looking statements. These statements consider the environment that we see today and carry risks and uncertainties that could cause our actual results to differ materially from those expressed in today’s call. We do not undertake to update any forward-looking statement made on the call.
With that, I’ll now turn the call over to Mr. Venu for his opening remarks.
Venu Lambu — Chief Executive Officer and Managing Director
Thank you, Vikas. Hello, everyone, and thank you for joining us on the call today. I’m excited to share the highlights from Q1 FY ’26, my first quarter as CEO and MD. As we continue to navigate market shifts, our robust strategy and disciplined execution have translated into an all-round performance. Vipul and I will discuss this during the course of this call. Let me begin by sharing the headline numbers.
In Q1 FY ’26, we reported revenues of $1.15 billion, reflecting sequential growth of 2% in US dollar terms and 0.8% in constant-currency terms. Our EBIT margins expanded by 50 basis points sequentially to 14.3%. Our order inflow for the quarter stood at $1.63 billion, up 17% year-on-year, marking the third consecutive quarter of order inflow exceeding $1.5 billion. I would now like to highlight some of the noteworthy deals that were achieved during the quarter. We have won our largest-ever deal with a global agri-business leader as part of their vendor consolidation strategy. We have been selected to implement an AI-driven model for application management, infrastructure support and cybersecurity services, including SAP/S4HANA, ServiceNow and Microsoft Azure platform with a strong focus on efficiency and simplification.
We were selected as a strategic partner by a leading digital company in the Kingdom of Saudi Arabia to manage their supply-chain and digital landscape. A global leader in professional services partnered with us for their supply consolidation initiative spanning client technology, enterprise technology and information security. In order to — in addition to these major wins, our pipeline remains robust with several large opportunities. Regarding our vertical performance, we reported sequential growth in dollar terms across all industries. BFSI grew 1.6%. Technology, Media and Communications stabilized this quarter, registering a growth of 0.8%. Manufacturing and resources experienced a growth of 0.3%. The Consumer business delivered robust growth, achieving 6.2%. Healthcare, Life Science and Public Services witnessed a growth of 4.8%.
In terms of geographies, Europe led with a sequential growth of 9.7%, Americas grew by 1.8% and Rest of the World declined 6% sequentially. Our headcount at the end of Q1 FY ’26 stood at 83,889, a decline of 418 employees. Our focused approach to operational efficiency resulted in an improvement of 2.3% in utilization levels from 85.8% in Q4 FY ’25 to 88.1% in Q1 FY ’26. As part of our continued focus on fresher induction, I’m pleased to share that we have onboarded 1,600 plus freshers this quarter. In addition to these operational strikes, we also received several recognitions across our strategic partnership during the quarter. Let me share a few.
LTIMindtree was honored with Diversity and Security Award at the 2025 Microsoft Security Excellence Award, emphasizing our dedication to promoting inclusive security teams and providing innovative Microsoft-based security solutions. We were named Google Partner of the Year 2025 for industry solutions in manufacturing for the second year in a row. We’ve been named the Databricks Business Transformation Partner of the Year, highlighting our exceptional contribution to driving data and AI-led transformation across industries. Our capabilities are well-recognized by industry analysts and we secured leadership positions in ISG provider leds, SAP Ecosystem 2025 for RISE with SAP implementation and SAP Business AI and BTP services globally. HFS Horizons, Energy and utility Service Providers 2025. Everest Group Talent Readiness for next-generation Application Services Peak Metrics Assessment 2025. You can read the full list in our press release.
In Q1, we made a significant progress in our transformation journey while delivering profitable growth. I’m pleased to share a few strategic updates. If you recall in Q4 of FY ’25, we spoke about focusing on few transformational initiatives. Firstly, our sales transformation has been crucial in strengthening our ability to increase our win rate in large deals. Secondly, the fit-for-future program has been instrumental in rebaselining our cost and improving agility. This has enabled us to streamline processes and operate more efficiently. Lastly, our strategic pivot towards becoming an AI-centric organization is well underway. This is not mainly about adopting new technology, but also redefining our business model and strengthening our internal foundations. These initiatives have contributed positively to our results.
Building on these efforts, we continue to expand our capabilities to remain relevant for our clients. In quarter one, we launched, our BlueVerse, our Agentic AI ecosystem for the enterprises of the future. It helps clients accelerate their AI concept to value journey. BlueVerse is powered by AI advisory, which accelerates innovation, transforms organization culture and drives optimization. AI Foundry, which not only helps build tailored AI solution, but also has the ability to orchestrate multi-agent solutions across various enterprise stacks and agent marketplace, an expanding repository featuring over 300 industry and function-specific AI agents designed to accelerate AI adoption across industries.
We also launched GCC as a service, a unique AI-powered industry offering that provides a modular unit-based framework for clients looking to establish, optimize and scale their capability centers effectively. This comprehensive catalog encompasses a wide range of services across build, operate, transform and transfer phases, allowing clients to leverage capabilities in a consumption-based service model. Our offering includes entity setup, infrastructure provisioning, facility management industry and technology solutions and access to our BlueVerse ecosystem, including our AI studios. Adding to the momentum, NextEra, our strategic joint-venture in Saudi Arabia with Aramco Digital became fully operational this quarter.
These growth initiatives are part of our journey to strengthening our digital transformation positioning through the convergence of human insight and intelligence system. In that context, I would like to highlight a few of our AI-led client success stories and progress on our internal adoption. For a large manufacturing company, we integrated AI throughout their engineering and operations, achieving a 25% improvement in mean time to resolve and a 30% improvement in mean time for self-service and equipment. For one of the world’s largest financial services institution, we enabled their AI-led legacy modernization journey, driving an 80% reduction in the time it takes to write a complex logic at 20% faster speed-to-market and 10% to 15% lower-cost.
For an auto rental major, we deployed a computer vision-based damage detection system that reduced inspection time from two weeks to under three minutes with over 90% accuracy. For utilities major, we used a Gen AI-based maintenance solution that boosted field services productivity by 30%, reduce rework by 28% and lowered operational costs by 18%. In addition, we have extensively adopted AI across our internal function. With 62 initiatives across seven product lines and nine business processes, we are driving an AI-led transformation from an employee experience to delivery excellence.
We are among the first adopters of Microsoft Security Copilot, incorporating the natural language assistive agent to aid our internal security team in incident response and threat hunting. Our HR and talent acquisition team have integrated AI throughout the talent lifecycle, enhancing employee experience and productivity. We have introduced Raima [Phonetic], an AI companion designed to support employees with a personal interaction for acuity resolution and HR support. Raima aids in various areas such as talent attraction, onboarding and recognition, while also providing executives with actionable insight on key performance indicators.
I will now turn over the call to Vipul for financial highlights.
Vipul Chandra — Chief Financial Officer
Thank you, Venu. Hello, everyone. We trust that you have reviewed our integrated annual report for FY ’25, which offers detailed disclosures encompassing both financial and non-financial metrics and highlights our ongoing commitment to ESG principles. Let me now walk you through the financial highlights for the first quarter of FY ’26, starting with our revenue performance.
Our Q1 revenue stood at USD1.15 trillion, reflecting a growth of 2% quarter-on-quarter and 5.2% year-on-year in dollar terms. Corresponding constant-currency growth was 0.8% quarter-on-quarter and 4.4% year-on-year. Our EBIT margin expanded by 50 basis points sequentially to 14.3% in Q1 FY ’26. This increase was primarily driven by our fit-for-future initiatives, which resulted in an approximately 1% improvement, although seasonal visa costs and forex impact partially offset the increase.
Profit-after-tax for the quarter stood at INR1,255 crores as compared to INR1,129 crores in the previous quarter, which is an increase of 11.2% quarter-on-quarter. The higher sequential increase in PAT versus EBIT was on account of higher exchange gain and other income. The quarter’s effective tax-rate was 27.3% compared to 26.2% in Q4. This was due to a one-off tax impact on the repatriation of some capital from one of the subsidiaries. Basic EPS was INR42.3 for the quarter as compared to INR38.1 in Q4 FY ’25. Our total DSO for Q1 increased to 81 days from 79 days last quarter. However, Q1 unbilled DSO improved to 22 days from 24 in Q4.
The operating cash flow to PAT ratio was 82.3%, down from 88.4% in Q4. Free cash flow to PAT ratio stood at 60.7% compared to 67.7% in Q4. Cash and investment balances stood at around USD1.5 billion or INR12,835 crores post the payout of final dividend for FY ’25 compared to INR13,346 crores in Q4 FY ’25. Return on equity for the quarter was at 22.1%. As of June 30, 2025, our cash flow hedges stood at USD3.87 billion and hedges on the balance sheet were USD284 million. For the quarter, our TTM — the trailing 12-month attrition continued to remain stable at 14.4%. On the ESG front, LTIMindtree has received a CRISIL ESG rating score of 73, placing us in the leadership category and another commendable score of 75 given by NSE Sustainability Ratings and Analytics Limited.
I’ll now hand it back to Venu for the business outlook.
Venu Lambu — Chief Executive Officer and Managing Director
Thank you, Vipul. In summary, this is a promising start to the year and we are committed to building on this momentum. We remain confident in our ability to sustain growth and improve profitability. With disciplined execution, deeper client engagement and a robust pipeline, we are well-positioned to deliver value to all our stakeholders as we navigate the ongoing challenging macro-environment.
With that, let me now open the floor for questions.
Questions and Answers:
Operator
Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] We take our first question from Sulabh Govila of Morgan Stanley. Please go-ahead.
Sulabh Govila
Yeah, hi. Am I audible?
Operator
Yes, sir. Sir, please go-ahead.
Sulabh Govila
Yeah. Thanks for taking my question. So my first question is with respect to the top-five planned bucket. From a Q-on-Q growth perspective, the growth appears slightly mutated relative to the company average that is there this quarter. So is there any sub-vertical where you think growth could have been better? And how should we think about this client bucket for the rest of the year?
Venu Lambu
Look, it’s — Sublabh, is your question on the top-20 client bucket?
Sulabh Govila
I said top-five.
Venu Lambu
Okay. Yeah, top-five. Look, I think if you actually look at the top-five client bucket, it’s actually 0.5% against 0.8% at the company-level, right, on a constant-currency basis. So it’s not — I mean, yes, it is lower, but it’s not something material that really worries us. It’s sort of a seasonal. There are certain spend that happens within the quarter and there are some spend which rolls up into the next quarter. So there is nothing which is materially that I can call out on the top-five account category bucket sort of.
Sulabh Govila
Okay. And how should we think about this bucket for the rest of the year?
Venu Lambu
Well, to be honest, not just for the top-five bucket, the overall business itself, we sort of looking at the commentary from one quarter to the next quarter because you know how the things are outside. So it’s too early to look at it from the full-year perspective. I can only say that as I mentioned in my outlook commentary, the growth momentum will continue and the growth momentum will be there across all the industries and across accounts. So that’s the best comment I can give you at this time, Sulabh.
Sulabh Govila
Yeah. And that’s clear. That’s clear,. Thank you. Second question is with respect to the margins, if I look at the segmental margins this quarter, the high-tech margins, we saw the high-tech margins coming off in the third quarter of last year when we had passed on some of the productivity benefits to the top client and they appear to have also come off again this quarter also. So if you could highlight what led to that, it’s a sharp decline of 200 basis points?
Venu Lambu
Vipul, you want to do that?
Vipul Chandra
Yeah. So I think in terms of the — you know…
Venu Lambu
We had some ramp-up.
Vipul Chandra
We had some late order ramp-ups in anticipation of some deals and the holding cost for those resources has primarily resulted in this impact in this quarter. But again, it’s a quarter-on-quarter variation. The ramp-ups sometimes get — comes in the later part or sometimes split over into the next quarter. So it’s a temporary phenomenon.
Sulabh Govila
Okay. Okay, understood. And then last bit again on the margins front, we saw gross margin inch up quite sharply based on the utilization improvement that is there this quarter. So one is that, how sustainable are these utilization levels that are there and what has led to the SG&A cost increase on a Q-on-Q basis?
Venu Lambu
Yeah. Look, let me comment on that and Vipul feel free-to add-on this, right? So look, I think if you recall, we had spoken about fit-for-future program, which is a very comprehensive program to rebaseline the cost in both the SG&A overheads as well as the direct cost and that has in produced result and that’s the — one of the key contributing factors that you see when we look at the margin improvement. And second thing is that in terms of sustainability going-forward, I think we’re reasonably confident of continuing this margin expansion moment as we go into Q2.
Third was utilization. Comment on utilization. Look, 88.1%, given that we have a reasonably decent demand, so I would have liked it to be slightly lower utilization so that we can maximize the potential of revenue realization. But the ramp-ups that happened against couple of large deals and the momentum that we saw in the quarter sort of pushed us to the higher utilization. Yeah, over a period of time, our preference is to bring it slightly lower down so that we can cater into the demand that comes within the quarter and it has to be fulfilled within the quarter. So…
Vipul Chandra
Also in terms of your question about the SG&A expense going up in this quarter versus last quarter. I think Q1, we normally see a seasonal uptick because of the marketing events and related travel expenses. So it’s a seasonal phenomenon to some extent in the Q1 versus Q4. Also in Q4 this — last year, we had seen some recoveries in provision for doubtful debts. It was lower in Q1 as compared to Q4. Q4 we had a good run on that side.
Sulabh Govila
Understood. Thanks for taking my questions.
Venu Lambu
Thank you, sir.
Operator
Thank you. Our next question is from Manik Taneja of Axis Capital. Please go-ahead. Mr. Taneja, could you please unmute your mic?
Manik Taneja
Hi, thank you for the opportunity. I hope I’m audible.
Venu Lambu
Yes, Manik. You’re audible.
Manik Taneja
Yeah. So basically while my question related to margins has somewhat been answered, I just wanted to check on the revenue performance within your top customers, if you could talk about what are you seeing within your top customers across financial services and the high-tech vertical? That’s question number-one. The second question is with regards to this margin improvisation program that we are running, if you could talk about the different levers that you think will come into play over the foreseeable future? And then a related question around any thoughts on wage hikes for the current year?
Venu Lambu
And what’s the third one?
Manik Taneja
Wage hike.
Venu Lambu
Oh, wage hike, okay sorry. So Manik, thanks for the question. Look, I think when we look at the tech and the media and communications sector, we see an interesting trend that’s happening over there, right? So there is a promote of the business model itself of the customers in that sectors, right? I mean, as an as they invest more and more onto their AIP mode, they are sort of managing their spend that is needed towards an investment towards making their business models aligned to the AIP mode. So that also offers a good opportunity for us in the long-run.
So I do feel that our approach is continue to keep that momentum going on as we go into the next sector. But I think fundamentally there are a lot of clients in that sector are actually going to redefine their business model. I think that’s going to be an interesting remodeling that will happen, especially when you sort of bring the AI capabilities and investment on the AI infrastructure that makes the entire even if it’s an ISV versus the hardware companies and how the hybrid is happening and also there’s a convergence of capabilities happening, right, in terms of their own acquisitions and companies expanding into the different areas and so on. So with that, we see as an opportunity, if we stay very close to our customers and in the long-run, I’m fairly optimistic about that sector.
BFSI, I think if I just look at the BFS aspect of it, it’s a sector which is still cautious in terms of its spend. Primarily you can relate to all the macroeconomic themes that you’re all aware of it. And what we intend to do is that we are focusing on those accounts within the BFS sector, which has the high-growth potential, that is well-positioned even though amidst all this macroeconomic environment. So at the end of the day, we can take a sectoral view, but I somehow feel that if you take account specific view, our ability to execute much sharper and get the best out of it amidst all the challenges is the kind of an approach that we’re adopting. So sector-wise, there is no change. It has been the same as what it was in Q4, but it all comes down to okay, which accounts we can get a better growth going-forward. So we’re taking a very upon specific approach than getting blurred with the sector narrative.
The second is with regard to the levers in Fit-for-Future. Fit-for-Future is not just about a cost-saving initiative. It’s a very comprehensive initiative that makes us more agile as an organization, more fit as an organization as we navigate in our future transformation journey. It has elements of simplification of the process. It has elements of how do you enhance the AI adoption into the internal environment. It has aspects in terms of how do you enhance the sales productivity. It has aspects of how do you look at the bench that we need to map it again is the demand that we need to do it. And also, of course, we can get smarter on other awarded expenses as well. And then finally, the direct cost, which is essentially the cost of delivery. So it’s — it’s all these levers that makes an organization Fit-for-Future. So I don’t like to pick-up one specific area. It’s a very comprehensive program. There’s a lot of focus in that from a governance standpoint, I personally review it every week on this along with my leadership team. So I’m very pleased that the whole organization is running behind to deliver the results on that.
With regard to the wage hike plan, look, at the moment, we haven’t spent time in planning for it. Sometime during the year, we’ll give you an update in terms of what’s our plan with regard to the wage hike.
Manik Taneja
Yeah, that helps. And if I can ask one quick one. This is a clarification question for Vipul. While you commented on the on the reasons for the segment — for the drop in segmental margins for high-tech. If you could talk about the HLS vertical as well because for now two quarters, we’ve seen those segmental margins come off in that industry segment compared to what used to be a trend for the last several quarters.
Vipul Chandra
So HLS vertical drop, I think is now I think on the HLS vertical side, to look on the positive side, we have seen a revenue growth coming in this vertical, which is also a change after a few quarters. And the drop in the margins has been cyclical as well as to some extent related to the drop in the volumes which had happened in the past. So with the recovery of the revenues in this margin and the cyclical nature playing out again, this margin should improve again. Another thing which has affected the margins in this segment is one of our public services project that got over and that is — that margin contribution from that project has gotten taken out and replaced with other projects which have come in. So again, it’s difficult to kind of look at it on a quarter-on-quarter basis. I think the overall margin improvement program that Venu spoke about is going to show results in all segments over a period of time.
Manik Taneja
Sure. Thank you and all the best for the future.
Operator
Thank you. Our next question is from Sandeep Shah of Equirus. Please go-ahead.
Sandeep Shah
Yeah. Thanks. Thanks for the opportunity. Just in terms of sustaining the growth momentum in future quarters, I just wanted to understand because in the first quarter, we had lot of new business PCP wins on the mega deals. And I think if I’m not wrong, outside the one deal we announced there was a second deal which we were expecting to close-in manufacturing in 1Q and there could be more deals in the pipeline. So is it fair to assume the growth momentum has an upside rather than a downside on a going-forward basis and this year’s revenue growth in a constant-currency could be similar to last year’s revenue growth in constant-currency.
Venu Lambu
Sandeep, thanks for the question. Look, I don’t like to give you a commentary with regard to the guidance for the full-year, which we usually don’t do it. But I can only talk about the traction in large deals. After Nachiket sort of took over the mandate of driving the large deal organization globally, we have a lot of activity that’s going on in the organization, right from the way we have the conversation with clients and proactively how we structure the large deals and our ability to win those large deals, right? So even the win rate of those large deals. So that traction is increasing significantly.
And as I said, the momentum will continue as we go into the next quarter. I don’t like to comment anything beyond the next quarter with the way how the macroeconomic changes so fast. And all this upside and downside commentary depends on what reference you have. From us, from our point-of-view, I’m looking at the reference of the Q1. I’m confident that from the reference point of Q1, we’ll continue the growth momentum as we go into Q2.
Sandeep Shah
Okay, fair enough. And your commentary about BFSI as a growth outlook is quite contradictory versus most of your large peers. So is it more to do with our client-specific issue or are we seeing a pattern across many of the BFSI clients?
Venu Lambu
Look, if you take a very-high level sectorial view, the commentary won’t be different from — won’t be different as such, right? But I somehow feel that the approach we have taken is a very deep, sharp focus on execution in our focus approach, right? So that’s a pitch that’s available for us to play in a game. So we want to be focused on that. And all the commentary with regard to our BFS vertical was in the context of those specific focused accounts, not a very high-level sectorial approach.
Sandeep Shah
Okay. Okay. And just the last two questions. Is it fair to assume many of your top client specifications are largely behind? And can you also give a color in terms of how is the large deal, mega-deal pipeline looking entering into 2Q?
Venu Lambu
Yeah, I’m not sure which issue you are referring to, if it is about productivity as a topic, I think we confirmed that in Q4 itself. And with regard to the large deal, I would request Nachiket to give his commentary on the large deal traction, please. Nachiket?
Nachiket Deshpande
Thanks, Venu. So as Venue mentioned, I think with the formation of the centralized focus, large deals, global large deals team, we are seeing the traction improve, both in terms of the deal invites, the pipeline of the deals that we have and also, as Venu said in the win ratios and the consistency with which we are pursuing these deals. So yeah, I think the short answer is, yes, we’re seeing the momentum continue at least in the next few quarters.
Sandeep Shah
Okay. Thanks and all the best.
Venu Lambu
Thank you.
Operator
Thank you. Our next question is from Surendra Goyal of Citi. Please go-ahead.
Surendra Goyal
Yeah, hi. Can you hear me?
Operator
Yes, sir.
Venu Lambu
Yes. We can hear.
Surendra Goyal
Yeah. So good evening. Did the largest deal that you talked about contribute to revenues in the first-quarter? And if yes, could you share any details and what should be the trajectory of ramp-up going-forward? And also any margin implications that we should be aware of?
Venu Lambu
Look, the last deal which we announced in the middle of the quarter, right, the revenue realization, the transition has started in Q1. So the revenue is staggered between Q1 and Q2. And of course, the subsequent quarters, as we enter into the steady-state and we start ramping-up into the areas that we are contracted for. So I would say it’s a revenue spread across a couple of quarters to start with and then it will be steady as we go along. There is no material impact on the margin with regard to the last year.
Surendra Goyal
Sure. Thank you.
Venu Lambu
Thank you.
Operator
Thank you. Our next question is from Ravi Menon of Macquarie. Please go-ahead.
Ravi Menon
Hi, thank you for the opportunity. Congrats on a decent quarter. The margins for the energy vertical, it’s significantly below company average. This is one of the margins that we have as we try to move our margins back towards 16% plus?
Venu Lambu
Give us a second, sorry, I didn’t — your voice is breaking in-between. Do you — was the question related to the manufacturing and energy utilities?
Ravi Menon
Yeah, the energy utilities vertical, where the margins are significantly below company average.
Venu Lambu
Vipul, you want to pick-up that question.
Vipul Chandra
Again, in terms of the manufacturing and energy vertical, there have been ramp-ups for a few deals which are underway and we have seen good growth coming in these verticals. So the margins are expected to pick-up as we go along and the ramp-ups stabilized.
Venu Lambu
Actually if I can add Vipul, right. I mean if you look at it, the manufacturing sector had significant growth for us on a sequential basis as well, right? So when you have that kind of a growth, you also build-up, ramp-up in the later part of the quarter that starts realizing the revenue for the subsequent quarter, so. And the other thing to note is that the growth in that sector also came in despite the pass-through that came off from Q4 versus Q1.
Ravi Menon
Thanks. And could you give us CC growth in Europe, please?
Venu Lambu
3%.
Vipul Chandra
CC growth in Europe was around 3%.
Ravi Menon
Okay. Thanks so much. Best of luck.
Venu Lambu
Thank you.
Operator
Our next question is from Rahul Jain of Dolat Capital. Please go-ahead.
Rahul Jain
Hello.
Operator
Please go-ahead, sir.
Rahul Jain
Yeah. Hi, thanks for the opportunity. Basically, I have one question is that if you look at your revenue coverage, it’s kind of a best-ever since we’ve been reporting this TCV data. So can we say that the growth rates are bound to improve here on taking FY ’25 level as a base.
Venu Lambu
Rahul, our endeavor is to do that to always get better from one year to the next year. But as I mentioned in response to the other question, I don’t want to give any specific guidance for the full-year. I’ll just leave with what I told in my outlook. We’re keen to continue this momentum as we get into the Q2 and which we are reasonably confident of.
Rahul Jain
Right, right. So I think the only thing which you said additionally was that you are confident of higher TCV this year versus the previous fiscal. So do you see the culmination of that into revenue is any weaker than the past year?
Venu Lambu
I didn’t say that it will be higher. We only reported that for Q1, we had the higher-growth of TCV. We did not comment on the full-year unless I miscommunicated that. But yeah, so that’s where it is. And yeah, of course, if we close big deals in the first-half of the year, it will start impacting our revenue as we go into the second-half of the year. So at the moment, we are focused on closing some of the big deals that are in the pipeline that Nachiket spoke about.
Rahul Jain
Surely. And last bit on the utilization front, what is an ideal operating level that you see should be ideal for our business momentum?
Venu Lambu
Look, it depends on the demand pattern we get. If we get — if we have a demand pattern of an orderly demand pattern, which gives us good visibility over a couple of quarters ahead, which is slightly bit more challenging in the macroeconomic environment, I would say probably 86%, 87% would be a healthy utilization to have.
Rahul Jain
The reason I ask this is because one of the peer actually specifically highlighted that demand-supply mismatch in terms of the talent pool. So you think our resources are pretty flexible that way or you think at current moment, it is ideal, but we need to work on it as well.
Venu Lambu
So is it more of a skill-set mismatch is the question?
Rahul Jain
Yeah. Yes.
Venu Lambu
Yeah. Look, to be honest, I don’t think we see a material difference on that. Yes, of course, there is always newer things that comes in our industry, especially with AI coming in, there are new skill-set that coming in. But is there anything that is actually becoming a bit of a drag for the growth or fulfillment and all that, we don’t see that honestly.
Rahul Jain
Okay. Okay. That’s helpful. Thank you and best luck for the year ahead.
Venu Lambu
Thank you.
Operator
Thank you. Our next question is from Nitin Padmanabhan from Investec. Please go-ahead, Mr. Padmanabhan, you may ask your question now.
Nitin Padmanabhan
Yeah, hi. Good evening. I hope I’m audible.
Venu Lambu
Yes, you are. Thank you.
Nitin Padmanabhan
So just wanted your thoughts on the retail — the consumer vertical, it’s done well this quarter. Anything specific that’s sort of — is it a large deal or what has contributed to the growth and how do you see things panning out there from this vertical perspective? The second thing I just wanted your thoughts on — so you did mention risks as we go through the year, uncertainties and all of that. Anything specific that you’re worried about across any of these verticals or is it just a broader macro concern that you have?
Venu Lambu
Well, I think it’s a broader of macro concern, but I think as I mentioned, the approach that I’m sort of recommending is that look, the environment is what it is, right? So it’s about how best you can get the growth by staying very close to our customers, by bringing in new capabilities, helping them in redefining their business model and so on. So if — so we are hugely focused on the execution part of it by staying very, very close to the customers. So if we stay that, then environment will remain what it is. We can’t influence that part of it and see what best we can get as a growth and that’s been our approach in Q1 and that’s how it has helped us to get the result for us in Q1. So that’s what we intend to continue in the subsequent quarters. Very specific to the consumer services, yes, there is a part of it that contribution was because of the large deal. But again, there has been a broad-based growth in the other sub-verticals as part of the consumer business and that also has helped us, whether it’s in travel, transport side of the business as well where the business uptick has been decent compared to the Q4.
Nitin Padmanabhan
Got it. Got it. And just one question for Vipul. Vipul, you mentioned that the Fit-for-Future program actually contributed to almost 100 basis points of margin expansion this quarter, but that was offset by visa and higher travel costs. You think that becomes a tailwind going into the next quarter or there’s some other headwinds as well?
Venu Lambu
I think Nitin, maths is pretty clear. So yes, it can deduce that.
Nitin Padmanabhan
Perfect, perfect, perfect. Thanks a ton and all the very best.
Venu Lambu
Thank you.
Operator
Thank you. [Operator Instructions] We’ll move to our next question that’s from Dipesh Mehta of Emkay Global. Please go-ahead.
Dipesh Mehta
Yeah. Thanks for the opportunity. I just want to get some understanding about the NextEra JV, how one should look the business scaling up there? And if you can help us our role and any margin profile difference in that business, so margin profile as well as our working capital cycle variation in that business, if you can provide growth perspective? Thank you.
Venu Lambu
Yeah. Look, NextEra is operational at Q1. We’re at the very early-stage of business ramp-up over there. And we’re seeing a good acceptance of these joint-venture capabilities. We formed a joint-venture with — one of the best-known brands in the Saudi market with Aramco Digital. So we have — we get entry to not many client organization within Aramco as well as outside of Aramco as well. So it’s a very early days, I would say, Dipesh right. As we go along in the journey over the next couple of quarters, I’m happy to call-out specifically on the on the deals and the traction that comes on the NextEra. But in the beginning, in the first 30, 60 days we are seeing a good discussions happening with Aramco as well as the other customers within the Saudi market. And with regard to the margin, I would suspect that it will be a little bit below our company average because of the market at which you sell the services compared to the deals that in US or another part of the world, it will be — yes, it will be less than the company average in that sense.
Dipesh Mehta
Understood. And last question is about the insurance. You made comment about BFS. Can you provide sense about how insurance is playing out for us and broad outlook, what are the demand drivers and what are the challenges you face in that business? Thanks.
Venu Lambu
Look, insurance demand drivers are all about tech modernization and again, the AI adoption in terms of their customer engagement, part of it, all internal processes agentifying. That’s the kind of discussions and the kind of opportunities discussions that we did with insurance. I think insurance will — we’re not seeing a big scenario change in insurance vis-a-vis Q4 to-Q1. Compared to BFS, I would probably say insurance, we have seen fewer deals on a comparison basis. Comparative BFS insurance is we have less number of deals compared to BFS.
Dipesh Mehta
All right. Thanks.
Operator
Thank you. Our next question is from Rishi Jhunjhnuwala of IIFL. Please go-ahead.
Rishi Jhunjhnuwala
Yes. Thanks for the opportunity. A couple of questions here. Firstly, when if we look at when the merger of the two companies happened, one of the key factors there were that there was significant or lack of overlap in key clients in terms of either service line exposure or otherwise and cross-sell, up-sell was a big opportunity there. If you look at past two to three years of data, at least in the top 40 clients, it doesn’t reflect growth being anywhere closer to what it could have been. Outside of the macro factors, can you give some color in terms of where we are on the journey of probably increasing the number of service lines to each of the key clients across the two entities that used to be there.
Venu Lambu
Look, Rishi, this is part of the sales transformation track that we have which is essentially focused on enhancing the sales productivity if I may say. And then one of the biggest levers of enhancing that productivity is that can you sell more capabilities to our existing clients. So that’s part of the transformation. We just made the start of that transformation. It’s not that it did not exist before, it was always there. We had a service lines both delivery and we have invested in service lines, sales organization globally as well. We are seeing good traction in specific service lines, but I think we can do a lot more in cross-selling and up-selling into our existing accounts, that’s a journey we are on.
And the more we do, it starts getting reflected in the company growth level as well. And if you actually see even for this quarter, I think out of 10 service lines, we had almost seven service line or eight service line which has shown good growth, both quarter-on-quarter growth and year-on-year growth and those growth have come across these service lines and that’s reflected in. The industry growth is a reflection of the service line growth as well. But yes, we can do a lot more to sell, cross-sell and upsell more.
Vipul Chandra
So I think just to add, Rishi, on this point, I think in the last few calls also, we have clarified that the cross-sell and upsell cannot be really looked at diverse for the market conditions in terms of driving growth. So ultimately for the cross-sell, upsell to both the clients have to be willing to commit fresh spends, which has been slow in the industry. So I think one area which you — which we have talked about in the past also is that in this environment, the way we have been able to get larger deals and participate in vendor consolidation, that also is a reflection of this capability.
Venu Lambu
Large deals will have multi-service sites. So I mean, if you look at the one which we announced, it has probably six or seven service lines built into it.
Rishi Jhunjhnuwala
Fair enough, sir. And secondly, you know, if we look at from a supply-side perspective, you’re currently at peak utilization, your sub-con expenses are lowest that it has been for the past four, five years and you haven’t hired much in the past two quarters whereas your the TCV or the order inflow has inched up reasonably well in the past two, three quarters. So how do we think about the dynamics there? Is it a function of a higher non-linearity that is going to play out due to productivity or is it something — or is there any other reason to that?
Venu Lambu
Yeah. Look, I think I explained the reason for utilization in the earlier question. It was also due to the ramp-ups that happened in the quarter and all the accelerated hiring that started in the later part of Q1, it’s going to come on-board in Q2, the hiring process that has accelerated. There are two, three things that we are doing very strategically in the talent supply-chain part of it, right, which I covered it in my commentary as well, right. In terms of how do we actually bring the AI capabilities in the way we source the talent, we match the skill-sets of the talent and how do we reduce the onboarding time of the talent under that. So that’s also part of our transformational initiative. So that we’ve actually made some good progress over there.
But having said that, yes, this is an area where, you know we need to do a lot more to get to that utilization level that I said that we can — if it is between 86% and 87%, it’s a good range to be around — at least at the end of Q2, if we can be around that range, it will help. So we are doing a lot of proactive hiring in that context. Our talent team is fully engaged to get to that ramp-up. In some way, it is a good problem to have our own, Rishi. We will mitigate that. Thanks. And I think I also called out the fresher induction, right, 1,600 people we inducted in Q1 and we will induct more throughout the year.
Rishi Jhunjhnuwala
All right, sir. Thank you. All the best.
Venu Lambu
Thank you.
Operator
Thank you. Our next question is from Debashish Mazumdar of SVAN Investments. Please go-ahead.
Debashish Mazumdar
Hey, hi, Venu. Thank you so much and a little late, but welcome back. So three questions I have. One is, if you hear the whisper in the industry, it is very clear that you guys are extremely aggressive in chasing especially large-sized deals. If I — but if I see the TCV that you announce every quarter for last three quarter it is hovering around $1,600 million, $1,700 million range, $1,600 million, $1,700 million range. So if you can give some direction that and at what level you are looking at or whether you are comfortable at this level of deal wins or how the pipeline is looking like?
Venu Lambu
I’ll request Nachiket to comment on that, please. Nachi, on the last deal phase.
Nachiket Deshpande
Yeah. So I think as we talked about earlier, we are seeing definitely an increased momentum on large deals. And even going into Q2, we hope to announce a few more and continue to build the pipeline for the rest of the year. So definitely the large deal closure rates will improve. On the order inflow, I think there are a lot more other factors that go into it on a quarter-on-quarter basis. So I wouldn’t say that it’s a one-to-one comparison. There are different renewal timings on various different customers and different industry segments. So the — if you look at on a yearly basis, I think you would definitely see a higher order booking and a large deals booking reflecting into that for the full financial year. In a quarter-on-quarter basis, I would say it would be a very difficult to exactly attribute that to the deal closures.
Debashish Mazumdar
Yeah. So is like $1.6 billion quarterly run-rate is a kind of comfort zone for you and you feel that this will give us sufficient amount of growth because I understand that Y-o-Y there is a growth and book-to-bill ratio for us has also improved. Do you think that INR1.6 billion is a correct number to look at?
Nachiket Deshpande
See, as our size grows, we would also have to keep up our order booking proportionate to that size to deliver similar growth that we aspire to grow, right? So to that extent, you would need to — we would want to see the growth in our order booking as well as we go along as our base size also increases. That’s how I would add.
Debashish Mazumdar
Sure. Understood. And the second question that I have is, if I just relate the vertical-wise growth and the top-five client performance, it seems to be that our tech client — large tech client is still not out of woods for us. So do you think that business has kind of bottomed-out and we will start seeing growth here?
Venu Lambu
Yeah. So look, I think in the Q4, I did mention that the productivity topic is behind us. Whatever the program we executed to deliver productivity program, we sort of executed it very well. And otherwise at the vertical level, if you actually see it, we have grown this quarter, right. Sequentially, we have grown the tech vertical, right? And the top — I don’t get very specific to a specific client situation. But if I just look at the overall vertical level, it has grown sequentially as such. But with regard to the top client, the productivity issues we had, that is not material. What we need to do is probably is to is to win more deals and expand our wallet share in that account, but we don’t have anything material issues that we have to deal with. It’s all sales that we need to focus on in the top client.
Debashish Mazumdar
Okay. And one last question is the rest of the world business that we see, it’s a — normally — we normally see seasonal degrowth in this quarter. So is it same like that or there’s something else to read in it?
Vipul Chandra
See, the rest of the world business also, one, it is a smaller pie as compared to the rest of the company overall in terms of revenue. And any seasonal variations do tend to get exaggerated because of the small base. And in terms of the rest of the world coverage, seasonality due to the license revenues in Q4 does play-out in Q1 in comparison. And we are also kind of looking at some more deals coming through in this vertical as well. So it could pick-up in the future as we go along. But as I said, it’s a small portion of the total.
Debashish Mazumdar
Okay, understood. No, the question that I’m trying to understand is, I mean, the point that I’m trying to get into is, okay, whether we are leaving few of the businesses to get into better margin because a lot of our peers is doing that in the rest of the world to get into a better margin levels and to focus more on the areas which matters. So is it more intentional or it’s just a seasonality? That is what I’m trying to get into.
Vipul Chandra
It’s just a seasonality aspect of it. I don’t think we are — we were —
Venu Lambu
We are always selectivity. Anywhere in the world, we are selective, not specific to the rest of the world, right? So it’s not just about revenue and profitability. It’s also about can we really add value in those engagements. So we qualify the opportunities in the context of whether we can add value to our customers and then, of course, does it fit into the right commercial profile.
Debashish Mazumdar
Sure, sure. Thank you so much.
Operator
Thank you. Our next question is from Sumeet Jain from CLSA. Please go-ahead.
Sumeet Jain
Hi, am I audible?
Venu Lambu
Yes, Sumeet. You are.
Sumeet Jain
Yeah. Thanks for the opportunity. My first question again is on probing your top account in the high-tech vertical. I mean, historically, it used to grow very strongly in June and September quarters. And obviously, you used to do a lot of product engineering work for their cloud platform, which still continues to grow pretty strongly. So can you just highlight, is there a change in the rhythm of the growth of that account going-forward, given that it’s still the most important account for LTIMindtree, how do you see that as a strategic account and what are the growth levers for you in that customer?
Venu Lambu
Look, I would probably answer it in two dimension, right? So firstly, the account has grown over a very long period of time very consistently. So we are at a pace where we are hugely material to the client. And our growth, we are seeing a greener pressure as the top client expands into the newer areas, right? So you know that discussion continues. But we also need to remember that we came at the back of a revenue net of the productivity gain in the last two quarters, right? So the whole team was engaged in delivering to that program. And now as we started this year, we started-off the good progress in the tech vertical with a sequential growth and our relationship is stronger as always, and we leverage that and look for opportunities where we can grow beyond that. See, I don’t want to compare it with historical trend because the pace was different, Sumeet.
Sumeet Jain
Got it. No, that’s helpful and sorry.
Venu Lambu
No. And also the market environment — market environment, even for the top client for that matter.
Sumeet Jain
Right, got it. And secondly, wanted to understand, I mean, you guys are doing a lot of initiatives on Gen AI. So I wanted to understand, are you seeing any sort of deflation in your existing business or the new — or the contracts which are coming up for renewal, are you passing on productivity benefits and seeing any sort of impact on the revenue growth? And then in relation to that, do you see non-linearity for your business between revenue growth and headcount growth because of Gen AI.
Venu Lambu
Yeah. I mean, look, the opportunities in the AI is something we are very, very optimistic about. And that’s why we have an AI organization under Nachiket and we have — we launched BlueVerse as an agentic ecosystem. We are sort of penetrating AI across all our service lines and industry verticals. With regard to the productivity ask that comes from the clients at the time of renewal or even at outside of the renewal process is always a discussion that we have evaluated because we have this relationship. And most of this productivity gain also comes at the back of incremental scope we can deliver for the customer, right?
So because every client wants to do more with less. So if we can get more coming our way and we can deliver the same more with less, it’s a win-win equation. So I think most of this productivity discussions, in my view will lead to a win-win discussion the way we are approaching it. So which is something which I’m fairly confident about it. There is no material impact because of productivity as a topic that I can call-out. But is there a ask from the clients with regard to the productivity? Absolutely, yes. That ask is always there. And our effort is to come out with a win-win equation that, okay, can we do more with the same client with less.
The third is with regard to the non-linearity, look, we’ll have to wait-and-watch how things will span out in terms of — because the nature of contracts also have to change in our existing book of business also, right? If there is a T&M contract and we convert that into the managed services, is a client okay to convert into managed services and can we bring AI within that managed services construct and thereby reduce the headcount. This is something we’ll have to do along with the customers. So the customer also has a significant role in redefining the way forward business model. So it’s too early to call-out either way. But you are seeing the trend anyways, right? Over the last two years, if you see the revenue addition that we have added and the headcount, there are enough indications to say that the non-linearity signs are visible. Is it visible to an extent that you can call out as a completely new business model? I don’t think that is there. But definitely, we are adding revenue either with the same headcount or with a slightly less headcount already.
Sumeet Jain
Yeah. Got it. And maybe one last question if I can squeeze in. I mean in your last in-person analyst meet, you obviously talked about a $10 billion revenue target by 2030-2031, but obviously, I think things have changed to that extent. But given the fact that are you having any ambition to grow probably in leaders quadrant or in double-digit, anything you guys are planning to give any outlook? I’m not asking for a quantitative guidance, but at least where do you stand compared to your competition?
Venu Lambu
I don’t know which competition is being referred, but in general, look, our aspiration or strategy is, firstly for the clients, we want to be very, very relevant in our positioning of digital transformation partner. And then second is, I spoke about all the transformation mandate of being very people-centric company with AI focus and third is the aspiration, right? The aspiration, of course, $10 billion revenue is an aspiration that we have and we are working towards that aspiration. So that aspiration hasn’t changed, right? And — but it’s all about reaching that aspiration goal one-step at a time. So that’s why I’m restricting myself to-Q1 and to the next quarter, which is Q2.
Sumeet Jain
Got it. Very helpful, Venu. Thanks a lot and all the best.
Venu Lambu
Thank you, Sumeet.
Operator
[Operator Closing Remarks]