Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / Company Results/  Mindtree Q1 profit up 37%, reports all-time high order book of $570 million
BackBack

Mindtree Q1 profit up 37%, reports all-time high order book of $570 million

The IT major reported Q1FY23 revenue of ₹3,121 crore primarily for its digital capabilities

Mindtree’s EBITDA margins expanded to 21.1% from 20.9% in the preceding three months due to operating efficiencies and currency benefits (Photo: Mint)Premium
Mindtree’s EBITDA margins expanded to 21.1% from 20.9% in the preceding three months due to operating efficiencies and currency benefits (Photo: Mint)

Mindtree Ltd’s net profit for the June quarter rose 37.3% from the year ago to 471.6 crore, driven by improved operational efficiencies, increased utilization and revenue growth.

The Bengaluru-based IT services major reported first quarter revenue of 3,121 crore, up 36.2% year-on-year on the back of healthy demand for its digital capabilities. Revenues grew 7.7% on a sequential basis.

Mindtree’s dollar revenue stood at $399.3 million, up 5.5% sequentially in constant currency, making it the sixth consecutive quarter of 5%-plus revenue growth in constant currency. The total contract value of deals stood at an all-time high of $570 million.

Commenting on the impact of macro-economic uncertainties, Debashis Chatterjee, chief executive officer and managing director of Mindtree said: “There has been no significant change in client behaviour, but we are monitoring the situation. Growth momentum looks robust for the first half of the fiscal year and we will wait for the second half."

The company’s earnings before interest, taxes, depreciation, and amortization (ebitda) margins expanded to 21.1% in the June quarter from 20.9% in the preceding three months due to improved operating efficiencies and currency benefits.

Analysts said Mindtree’s performance has been steady. “Strong deal wins, healthy hiring momentum, and strong revenue growth despite weakness in RCM (retail, consumer products and manufacturing) point towards strong near-term demand. Impressed with margin beat amid high supply side pressures for the industry," said Aditi Patil, a research associate at Prabhudas Lilladher.

However, the attrition rate for the June quarter increased from 23.8% in the preceding three months to 24.5%, indicating strong demand for technology professionals. “It will take a few more quarters for the attrition to stabilize," Chatterjee said. Mindtree added 4,700 employees during the quarter taking the total headcount to 37,455 as of 30 June.

Earlier this year, Larsen and Toubro Infotech (LTI) and Mindtree, the two publicly traded units of India’s largest engineering firm, agreed to merge. The merged entity, LTIMindtree, is poised to become India’s sixth largest IT services firm by revenue and fifth in terms of market capitalization. The merger is expected to be completed by the end of this fiscal year.

LTIMindtree, with a combined sales of $3.5 billion, will be able to bid for bigger orders and offer wider range of services to clients, considering that larger customers prefer hiring fewer vendors offering end-to-end services. Chatterjee will lead the combined entity.

IT services companies have been on an acquisition spree to strengthen their capabilities in cloud, the key driver of digital transformation projects.

Last year, Mindtree acquired NxT Digital business of L&T Group to enhance its cloud-based internet of things (IoT) and artificial intelligence (AI) capabilities for industry 4.0. LTI had acquired PowerUp Cloud in 2019 to set an ambitions $1 billion cloud practice.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 13 Jul 2022, 06:27 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App