Mindtree net profit jumps 34% to Rs 437.5 crore in December quarter

IT firm Mindtree on Thursday posted a 34 per cent jump in consolidated net profit to Rs 437.5 crore for the December 2021 quarter, and exuded confidence in continuing its growth momentum on the back of robust demand and aggressive customer mining.

The Bengaluru-based company had posted a net profit of Rs 326.5 crore in the corresponding period last year. Its revenue grew about 36 per cent to Rs 2,750 crore in the quarter under review from Rs 2,023.7 crore in the year-ago period.

In dollar terms, net profit rose 32.1 per cent to USD 58.3 million, while revenue increased 33.7 per cent to USD 366.4 million in the said quarter over the year-ago period.

“Our endeavour has been to have the industry-leading profitable growth and we are still sticking to that. If you look at the momentum that we have generated over the last five quarters, we believe that given the demand scenario, that momentum should continue,” Mindtree CEO and Managing Director Debashis Chatterjee told reporters.

He added that while the company is keeping a watch on the pandemic situation, there should not be too much of an impact.

“Overall, I think we are going to see the momentum continue into Q4 as well. In terms of going forward, clients are still not done with their budgeting cycles, but at a broad level, the demand that we see at a macro level, I think we are very confident that the demand environment is strong, and growth is here to stay at a very high level,” he said.

Chatterjee said the company has continued its positive revenue momentum through the third quarter of FY22 on the back of robust demand, aggressive customer mining, and end-to-end digital transformation capabilities.

He added that the company’s sequential revenue growth of 5.2 per cent in constant currency reflects the strength of its strategy, execution, partnerships, and continued investments in its business and people.

“Our order book for the quarter was USD 358 million, up 14.6 per cent year-over-year, and our year-to-date deal TCV (total contract value) crossed USD 1.2 billion. Our Ebitda margin for the quarter was 21.5 per cent,” he said.

Ebitda stands for earnings before interest, tax, depreciation and amortisation.

In the first nine months alone, Mindtree’s PAT (profit after tax) of USD 158.8 million surpassed the PAT of the preceding fiscal year, Chatterjee noted.

At the end of the December 2021 quarter, the company’s active client base stood at 265. It had 31,959 employees at the end of the third quarter with trailing 12-month attrition at 21.9 per cent. Mindtree onboarded more than 4,500 people in the December quarter.

“To meet the growing client demand for our services, we have re-energised our recruitment engine. We are not only on track to meet our aggressive hiring targets for FY22 but also expect to significantly increase hiring in the coming quarters,” Chatterjee said.

He added that the company is also tapping into tier-II and -III cities, setting up offices in Coimbatore and Warangal.

“With a rejuvenated campus hiring programme, we expect our hiring momentum from campuses to increase by 40 to 50 per cent through FY23. Mindtree Edge – our unique Learn and Earn program for BSc and BCA graduates – continues to progress as planned.

“By re-modelling and strengthening our flagship training programme for fresh graduates hires, we have been able to accelerate freshers deployment to client projects,” he said.

He added that the focus continues to be on complementing external hiring with internal talent development.

Indian IT services companies have been dealing with high attrition rates as demand for digital talent has outstripped supply, leading to what industry experts call a “war for talent”.

In the December 2021 quarter, TCS has seen its attrition rate rising to 15.3 per cent in IT services from 11.9 per cent in the previous quarter. Infosys has seen voluntary attrition (last 12 months – IT services) going to 25.5 per cent as against 20.1 per cent in the September 2020 quarter.