Margin gains help Mindtree find its feet in Q3, new contracts a concern

Slow pace of new contracts remains a concern despite revenue growth

After underperforming significantly on the growth and margin fronts in the September quarter, Mindtree put up a better-than-expected show in the December quarter. 

It posted a 1.5 per cent sequential dollar revenue growth, led by a strong uptick from its top clients, and thus helped address concerns on client attrition amid a management transition.  

The increase in share of revenues from project-based contracts to fixed-priced ones is another positive. The share of fixed-priced contracts increased by 280 basis points sequentially to 59 per cent, in line with the company’s strategy to move towards annuity-type revenues. 

In addition to revenue growth,