Mindtree's net profit jumps 88% to Rs 253.7 cr; salary hikes from January

The firm's revenues remained flat year-on-year at Rs 1,926 crore during the period under review and witnessed a marginal 1 per cent gain sequentially

IT services firm Mindtree posted a net profit of Rs 253.7 crore, a jump of 87.9 per cent year-on-year (YoY) and 19.1 per cent sequentially, in the September quarter (Q2) of FY21. 

A cost-saving of around Rs 128 crore in other expenses helped the firm beat estimates, apart from operational efficiencies.

The firm’s revenues remained flat YoY at Rs 1,926 crore and it witnessed a marginal 1 per cent gain sequentially. Dollar revenues stood at $261 million, a 3.1 per cent rise in constant currency terms over the previous quarter. Operating margin of the L&T Group-owned firm expanded 140 basis points sequentially to 19.6 per cent in Q2. The numbers were higher than estimates. 

Brokerage firm Centrum Broking had estimated profit after tax (PAT) at Rs 231.7 crore, up 8.8 per cent QoQ and 71.6 per cent YoY. In rupee terms, net sales were expected to come in at Rs 1,944.5 crore, up 1.9 per cent QoQ and 1.6 per cent YoY. 

In Q2, Mindtree’s headcount stood at 21,827, down by about 130 employees sequentially. Its attrition rate also fell by 280 basis points to 13.8 per cent. The firm kicked off its promotion cycle during Q2, while salary hikes will be paid according to industry standards effective from January 2021. The board also declared an interim dividend of Rs 7.50 per share. 

“Our approach of redefining possibilities (digital resilience and business continuity programme for clients) in the new normal enabled us to deliver a balanced performance,” said Debashis Chatterjee, chief executive officer and MD. 

“While we see green shoots emerging in travel, transport and hospitality sector, we continue to see good growth momentum in other industry segments in Q3, despite being a seasonally weak quarter.”

The company’s total contract value of deals signed stood at $303 million during the quarter. Segment-wise, communications, media and technology was the only vertical that witnessed a yearly revenue growth, up 26.1 per cent, while travel and hospitality remained under pressure, accounting for 8.3 per cent of the company’s overall revenue, compared to 16.1 per cent a year ago.

The share of revenue from its biggest geography, North America, rose to 77.4 per cent of the total revenue, compared with 73.8 per cent in the year-ago period. However, continental Europe and Ireland witnessed YoY decline.