Mindtree Q1 profit rises 61% to ₹343.3 crore

Mindtree Ltd on Tuesday posted its fourth consecutive quarter of profitable growth as the net profit for the June quarter rose 61% annually to ₹343.3 crore driven by growth in revenues and various operational efficiency parameters and increased utilization.

The Bengaluru-based IT services company’s revenue for the first quarter stood at ₹2,291.7 crore, up 20% on a year-on-year basis driven by broad-based growth. On a sequential basis, revenues grew 8.6% indicating gradual recovery in business as key geographies are opening up post covid-19 vaccinations.

The closely-watched dollar revenue stood at $310.5 million, up 7.7% sequentially and 22.6% from the previous year, on the back of deals worth a total contract value (TCV) of $504 million during the quarter – a mix of annuity and recurring deals.

“We are pleased to report a strong start to FY22 with broad-based first-quarter growth across all service lines and industry segments,” said Debashis Chatterjee, chief executive officer and managing director, Mindtree. “Our highest-ever orderbook of $504 million affirms that the focused execution of our strategy and our client-centricity in re-imagining business models for the digital era are helping us drive profitable and sustainable growth.”

Mindtree’s EBITDA margins narrowed to 20.3% from 21.9% in the preceding quarter due to operating efficiencies and currency benefits.

“Going ahead, strong order book provides a good visibility of double-digit revenue growth over FY22 but rising attrition may weigh on EBIT margin,” said Suyog Kulkarni, senior research analyst at Reliance Securities.

Digital continues to drive Mindtree’s business and earlier this year, it completed the acquisition of the NxT Digital Business from Larsen and Toubro (L&T) for ₹198 crore, a move that is expected to enable the mid-sized IT firm to capture opportunities in the internet of things (IoT) and industry 4.0 space.

The attrition rate for the June quarter increased to 13.7% from 12.1% in the preceding quarter indicating strong demand in the industry. Mindtree added 3,400 employees in the June quarter taking the total headcount to 27,256 employees as of 30 June.