Mindtree net profit jumps 66% to Rs 326 crore; co sees strong pipeline ahead
Mindtree net profit jumps 66% to Rs 326 crore; co sees strong pipeline ahead

IT firm Mindtree on Monday reported a 65.7 per cent rise in its consolidated net profit to Rs 326.5 crore for the December 2020 quarter, and said its deal pipeline continues to be healthy and strong.

The Bengaluru-based company had posted a net profit of Rs 197 crore in the year-ago period. Its revenue grew 3 per cent to Rs 2,023.7 crore in the quarter under review, from Rs 1,965.3 crore in the year-ago period.

"We have been working on improving our operational parameters since last year. On a quarter-on-quarter basis, there has been a progress made that has helped us in terms of improving our margins," Mindtree Chief Financial Officer Vinit Teredesai said during an earnings briefing.

Teredesai added that this is a continuous journey that the firm will continue to pursue and it aligns with the company's strategy of delivering profitable growth.

On a sequential basis, net profit grew 28.7 per cent and revenue was up 5.1 per cent.

In dollar terms, Mindtree saw its net profit rising 59.3 per cent to USD 44.2 million, while revenue declined marginally to USD 274.1 million in the December 2020 quarter over the year-ago period.

Mindtree CEO and Managing Director Debashis Chatterjee said, "Our third quarter has by far been the best performing in recent years backed by broad-based revenue growth of 5 per cent across our verticals and service lines, robust margin expansion of 350 bps (basis points), and a healthy order book of USD 312 million." He added that the company is witnessing strong business momentum across all verticals with a significant demand for cloud, data and analytics capabilities.

"Our strategic initiatives are resonating well with our clients and helping us in redefining possibilities together. We continue to calibrate the way we conduct our business, build on our core strengths to establish a stronger and more resilient organisation," Chatterjee said.

He added that the company's commitment to deliver superior client satisfaction, consistent and competitive profitable growth remains stronger than ever.

The company's order book of USD 312 million for the quarter represented 51 per cent y-o-y growth, Chatterjee said.

"For the nine months of this financial year, our order book crossed the USD 1-billion mark... We continue to capitalise on the evolving market dynamics with solutions that help enterprises navigate the new normal and grow their businesses," he said.

Thanks to the strategic focus and hard work of Mindtree employees, the company is now well-positioned to continue delivering profitable growth, he added.

The results were announced after the close of trading hours. Shares of Mindtree closed at Rs 1,660.60 apiece, down 2.17 per cent from the previous close on the BSE.

Suyog Kulkarni, senior research analyst at Reliance Securities, said Mindtree's revenues at USD 274.1 million were in line with expectations.

At the end of the December 2020 quarter, the company's active client base stood at 276, and eight new clients were added during the quarter, the filing said.

"We continue to witness strong demand across our focus service line industries.

"Our strategy investments in people technology and partnerships are opening numerous opportunities for us to redefine possibilities for our clients. Our pipeline continues to be healthy and strong," he said.

Mindtree had 22,195 employees at the end of the December 2020 quarter with trailing 12-month attrition at 12.5 per cent.

"We continue to onboard new hires on our digital platform. And, at the end of the third quarter, we had over 22,000 Mindtree minds.

"We have honoured all our offers to campus hires and have been onboarding regularly in batches, with the last batch getting onboarded next month," Chatterjee said.

He added that the company has completed its promotion cycle as planned and has delivered increments across the board, effective January.

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