Mindtree PBT more than doubles in Q1; revenues up 4.1% to Rs 1,908.8 cr

Revenue of the firm grew 4.1 per cent year-on-year to Rs 1,908.8 crore during this period though it declined 6.9 per cent sequentially

IT services company Mindtree delivered a mixed set of numbers for the first quarter of financial year 2020-21 (Q1FY21) as it beat profit estimates because of a reduction in other expenses. Its profit before tax (PBT) stood at Rs 289.8 crore, up 129.6 per cent year-on-year (YoY), and 10.9 per cent sequentially, according to Mindtree’s exchange filing. 

The Bengaluru-headquartered firm posted a net profit of Rs 213 crore, a rise of 129.8 per cent YoY and 3.3 per cent sequentially. The jump in net profit was mainly helped by around Rs 87.7 crore in savings the company made towards travel, reduction in other discretionary spends, and optimisation of subcontracting costs.

The firm’s revenues grew 4.1 per cent YoY to Rs 1,908.8 crore during this period, though it declined 6.9 per cent sequentially. Dollar revenues stood at $253.2 million, a 9 per cent fall in constant currency terms over the previous quarter. Operating margin of the L&T Group-owned firm improved 110 basis points sequentially to 18.2 per cent in Q1FY21.

The company said it has won deals worth of $391 million during the quarter. Segment-wise, high-tech services was the only vertical that witnessed a sequential growth, up 7.6 per cent, while travel and hospitality, which accounts for 16 per cent of the company’s overall revenue, more than halved.

“Against the backdrop of a very challenging environment globally, our order book continues to be healthy and we continue to renew and gain market share within our portfolio,” said Debashis Chatterjee, chief executive officer and managing director, Mindtree. In Q1, Mindtree’s headcount stood flat at 21,955 sequentially, with its attrition rate falling by 80 basis points to 16.6 per cent.

“In the near term, we continue to see uncertainty in the travel segment (due to the pandemic). While deal conversions are taking a little longer, we are seeing good demand traction in communications, media and technology (CMT) and retail, consumer-packaged goods and manufacturing (RCM) segments. With all these, we expect Q2 to be better than Q1."

 “All the pending (job) offers will be rolled out and we will continue hiring, though it will be limited to fulfill only specific needs,” Chatterjee said. The company does not intend to lay-off employees, he added.

The management also downplayed concerns stemming from US President Donald Trump's H1B visa restrictions saying that around 70 per cent of its hires in the US are locals.