Befreiender Konzernabschluss Zum Geschäftsjahr Vom 01.04.2021 Bis Zum 31.03.2022 - Larsen & Toubro Infotech GmbHHamburg (vormals: München)
| Published date | 04 Mayo 2023 |
| Section | Rechnungslegung / Finanzberichte |
| Issuer | Larsen & Toubro Infotech GmbHHamburg (vormals: München) |
Larsen & Toubro Infotech GmbH
Hamburg (vormals: München)
Befreiender Konzernabschluss zum Geschäftsjahr vom 01.04.2021 bis zum 31.03.2022
Larsen & Toubro Infotech Limited
Mumbai/Indien
Integrated Annual Report 2021-22
Management Discussion and Analysis
I. Global economic review
Global growth prospects are expected to slow as economies grapple with supply disruptions, elevated inflation, record debt and persistent uncertainty. Growth is expected to moderate from 5.9% in 2021 to 4.4% in 2022 largely reflecting forecast markdowns in the two largest economies, the United States (US) and China.
While Omicron will weigh on activity in the first quarter of 2022, this effect will fade starting in the second quarter. A revised assumption removing the “Build Back Better” fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage-points revision for the United States. In China, pandemic-induced disruptions related to the zero-tolerance Covid-19 policy and protracted financial stress among property developers have induced a 0.8 percentage-point downgrade. Global growth is expected to slow to 3.8 percent in 2023. The forecast is conditional on adverse health outcomes declining to low levels in most countries by end-2022, assuming vaccination rates improve worldwide, and therapies become more effective.
Elevated inflation is expected to persist for longer than envisioned with ongoing supply chain disruptions and high energy prices continuing in 2022. Assuming inflation expectations stay well anchored, inflation should gradually decrease as supply-demand imbalances wane in 2022 and monetary policy in major economies responds.
Risks to the global baseline are tilted to the downside. The emergence of new Covid-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility, and localized wage pressures could create uncertainty around inflation and policy paths.
As advanced economies lift policy rates, risks to financial stability and emerging market and developing economies' capital flows, currencies, and fiscal positions, especially with debt levels having increased significantly in the past two years, may emerge. Other global risks may crystallize as geopolitical tensions remain high, and the ongoing climate emergency means that the probability of major natural disasters remains elevated.
Monetary policy in many countries will need to continue on a tightening path to curb inflation pressures, while fiscal policy, operating with more limited space than earlier in the pandemic, will need to prioritize health and social spending while focusing support on the worst affected. In this context, international cooperation will be essential to preserve access to liquidity and expedite orderly debt restructurings where needed. Investing in climate policies remains imperative to reduce the risk of catastrophic climate change.
Source: International Monetary Fund - World Economic Outlook, January 2022
3.8% Estimated global growth rate for 2023
II. Industry overview
According to NASSCOM, the Indian IT services industry crossed the $200 Bn revenue mark this financial year to touch a record $227 Bn. Technology was the panacea that enabled firms to not just keep the lights on, but also repivot their business models to an online mode, adapt to changing market dynamics and customer needs, and enable collaboration in a distributed work model.
During the year, the industry saw $30 Bn of incremental revenues and an overall growth rate of 15.5%, the fastest since 2011. All subsectors of the industry recorded double-digit growth. Exports (including hardware) grew 17.2% with revenues of $178 Bn and e-commerce grew 39% to reach $79 Bn in FY22.
India has also emerged as a global hub for digital talent with more than 5 Mn tech workers. Tech firms quickly adapted to hybrid work models and scaled up their capability-building programmes. The industry recorded nearly 10% estimated growth in direct employees in FY22, with the highest-ever net addition of approximately 450,000 to its employee base.
Further, with one out of three employees already digitally skilled, the digital tech talent pool stands at 1.6 Mn, growing at a CAGR of 25%. With massive focus on reskilling and upskilling, the tech industry reskilled around 280,000 employees in FY22.
Going forward, the industry will continue working on priorities like attracting and retaining talent, ramping up hiring for skill and scale, especially for digital, campus and non-engineering talent. The industry will also continue to see positive revenue growth driven by strong deal pipelines, enhanced digital demand and high tech spends.
1.6 Mn Digital tech talent pool
$30 Bn Incremental revenues in the industry
III. Our business
LTI is a global technology consulting and digital solutions company helping more than 485 clients succeed in a converging world. With operations in 33 countries, the business goes that extra mile for its clients, and accelerates their digital transformation.
Further details are available in the 'LTI at a Glance section' on Page 6 of Annual Report.
Details on our strategy and how we create value are available on Page 26 of Annual Report.
Opportunities
a. Banking and Financial Services:
LTI has seen strong year-on-year growth of 37.4% in this vertical. Digital transformation continues to be a strategic priority and key area of focus for Banking and Financial Services firms.
Firms are spending more on change the bank initiatives relative to run compared to 2-3 years back. Technology investments are seen across large and medium-sized banks and across sub-verticals such as capital markets, payments, retail banking, wealth management, and so on.
Unprecedented liquidity in the economy due to massive global stimulus programmes and new ways of working because of the pandemic, have further fuelled these investments. Companies are investing in improving customer experience by shrinking the core and building a layer of service-oriented interfaces. This gives them agility to launch a new product and offers a higher degree of straight-through processing.
Shift from cash to online transactions further drives opportunities for payments and cards companies. In addition, technology spend on automation of processes and workflows help reduce manual effort and physical presence, and contribute to operational efficiency. Firms are confident that technology investments will pay off either in terms of top-line or bottom-line expansion.
37.4 % Year-on-year growth registered in Banking and Financial Services segment
b. Insurance: LTI grew 11.2% year- on-year in this vertical. Global insurance companies have been impacted by large payouts. Beyond supporting customers through an ongoing global health crisis, they have also faced increased competition from a growing number of insurtechs and pressure from customers to deliver a seamless and digital-first experience.
Changes in consumer demand are driving the need to bring new, more responsive products and services to the market at an even faster pace. Automated underwriting, claim processing and fraud detection driven by advanced analytics, have been key areas of spend in 2021.
We expect 2022 to continue to disrupt the status quo even more dramatically across all sectors. Players in leading markets are expected to increase their tech spend and further accelerate plans for cloud-enabled, digital transformation. Major initiatives will be focused on enhancing online user experiences with an increased emphasis on hyper-personalisation and data- driven ecosystems as well as remote distribution networks, augmented reality and IoT.
Automated underwriting, claim processing and fraud detection driven by advanced analytics, have been key areas of spend in 2021.
c. Manufacturing: This sector includes Industrial Manufacturing, Automotive and Aerospace and was one of the most impacted sectors by the pandemic. LTI delivered a 23.4% year-on-year growth in this vertical. Recovery gained momentum in 2021, riding on the back of vaccine rollouts and rising demand.
As industrial production and capacity utilisation surpassed pre-pandemic levels midyear, strong increases in new orders for all major subsectors indicated continuing growth in 2022. However, optimism was held in check by caution from ongoing risks such as inflation, workforce shortages and supply chain instability. In this environment, business agility and resilience are critical requirements for organisations. The sector saw healthy budgets and capital allocation for digital transformation in 2021.
In 2022, the industry is likely to continue to see an influx of investment in automation and digitisation. Manufacturers are adopting a more cost-conscious mindset with companies shifting investment towards digital solutions that support increased agility and better risk management. Tools that capitalise on the use of data are also of prime importance.
23.4% YoY growth delivered in manufacturing vertical
d. Energy and Utilities: LTI delivered a 10.8% year-on-year growth in this vertical. The Oil & Gas industry has rebounded strongly in the second half of FY22 with both demand and oil prices bouncing back to prepandemic levels. However, there remains uncertainty over market dynamics and sustenance of prices through the year.
The journey of transformation has just begun for the industry and it is increasingly relying on technology and automation to make its operations more efficient. Companies are mostly investing in legacy modernisation, cloud migration, data, cyber security and IT-OT integration. We expect investments on energy transition and sustainability to go up even more in 2022.
The utilities sector has been observing a key trend around...
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