Mindtree meets street estimates as Q3 profit rockets 34%

IT services major Mindtree met street estimates with robust sequential revenue and net profit growth that were in line with what analysts had expected the company to deliver for the three months ended Dec. 31.

The firm reported a 34% rise in net profit to Rs 437.5 crore over the year-ago period. Profit rose 9.7% from the second quarter ended Sept. 30. In dollar terms, profit rose 32% year on year and grew 8% sequentially to $58.3 million.

Mindtree’s revenue in the quarter rose 6.3% sequentially and 35.9% from a year earlier to Rs 2,750 crore. In dollar terms, revenue grew 4.7% sequentially and 33.7% year on year to $366.4 million.

The company’s revenue grew 5.2% in constant currency terms.

Other Key Highlights

1) EBITDA rose 11.6% sequentially and 26.5% year-on-year to Rs 592.1 crore.

2) EBITDA margin rose marginally to 21.5% compared with Q2 but was lower than 23.1% in Q3 of FY21.

3) The company added eight new clients and lost six, leading to two net additions and taking the total to 265.

4) It added one client with $20 million contract, three clients with $10 million plus value and two in the $5-10 million range.

5) Trailing 12-month attrition rises to 21.9% from 12.5% a year ago and 17.7% in the period ended September 30.

Management Commentary

“We are pleased to have continued our positive revenue momentum through the third quarter of FY22 on the back of robust demand, aggressive customer mining, and end-to-end digital transformation capabilities,” said Debashis Chatterjee, Chief Executive Officer and Managing Director, Mindtree.

“Our sequential revenue growth of 5.2% in constant currency reflects the strength of our strategy, execution, partnerships, and continued investments in our business and people. Our order book for the quarter was $358 million, up 14.6% year-over-year, and our year-to-date deal TCV crossed $1.2 billion,” he said.

He also said that in the first nine months alone, Mindtree’s profit of $158.8 million surpassed profit of the preceding fiscal year. “The passion of our future-ready talent and the trust of our clients position us well in our endeavor to continue to deliver profitable industry-leading growth in the coming years,” he added.