Mindtree: Q3 and guidance strong, but high attrition remains a concern

Valuation at 38x estimated FY23 earnings for last year's top IT stock performer leaves little room for disappointment

Mindtree declared strong results and guidance for the third quarter of financial year 2021-22 (Q3FY22). However, attrition rates grew, which is a concern. Revenue grew 4.7 per cent sequentially (33 per cent year-on-year, or YoY) to $366.4 million, although Q3 is usually soft.

The Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin rose by 1 per cent to 21.5 per cent. In constant currency rupees, Mindtree saw 5.2 per cent growth in revenues on QoQ (quarter-on-quarter) basis. The reported PAT (profit after tax) of Rs437. 5 crore was up 10 per cent QoQ and 34 per cent YoY.

Revenue