Mindtree logs 21% rise in net in FY16

FY16 has seen industry-leading growth of 22.5% (in dollar terms) for Mindtree: Rostow Ravanan

Mindtree on Monday reported a 21.2 per cent growth in net profit at Rs 156 crore for the quarter ended March 31, against the year-ago period.

Revenues jumped 44.2 per cent to Rs 1,324 crore due to healthy order-booking and traction in the digital business.

On a sequential quarter basis (compared with the trailing quarter), net profit grew 3.4 per cent while revenues went up nine per cent. For FY16, the Bengaluru-headquartered company’s net profit grew 12.5 per cent at Rs 603 crore, while revenue grew 31.7 per cent.

“FY16 has seen industry-leading growth of 22.5 per cent (in dollar terms) for Mindtree,” said Rostow Ravanan, chief executive officer & managing director.

The midsize information technology (IT) services company delivered all-round growth, he said, with all four key verticals performing above-expectation and bagging double-digit growth backed by strong execution.

“We continue to execute well, and 2017 will also be a high-growth year for Mindtree and we will maintain our overall growth rate like in the past.”

The growth during the quarter was supported by a strong volume growth (growth is billed man-hour during the quarter) of 4.7 per cent. During the quarter, the company added 37 new clients, while the total contract value (TCV) of the deals signed the quarter was around $281 million. For the full year, the company signed deals with a TCV of around $886 million.

The operating margin during the quarter was impacted by around 60 basis points after taking into account the margin profile of two companies Mindtree had acquired last year.

Mindtree said from July 1, it would give a salary hike for its employees. After taking into account the increase in wage bill and the lower margin profile of the acquired companies, there could be a short-term impact on margin.

The company, however, said it was expected to show an improvement in operating profit margin for the full year (FY17) as it was expecting the visa cost to be lower in FY17 than the previous year. In FY17, the company was expecting its visa cost to be around $2 million, against $3.5 million in the previous financial year as it had “already added a lot of capacity in the US through local hiring and employees added through acquisitions”.

During the quarter, Mindtree added 1,020 employees on a gross basis and the headcount was 16,623. Attrition at 15.7 per cent was the lowest in the past six quarters.

Mindtree’s share price rose 6.22 per cent to Rs 731.35 at the end of the day’s trading on the BSE on Monday.