Mindtree reported a 7.9 percent sequential increase in net profit to Rs 508.7 crore for the July-September period, far ahead of Street estimates — an all-round strong performance on the back of strong revenue growth owing to deal wins and easing attrition.
Revenue of the Bengaluru-based software exporter came in at Rs 3,400.4 crore for the three-month period, up 8.9 percent compared with the previous quarter, according to a regulatory filing.
Analysts in a CNBC-TV18 poll had estimated the IT firm's quarterly net profit at Rs 482.6 crore and revenue at $416.3 million.
Revenue in constant currency terms increased 5.7 percent to $422.1 million.
The company said its revenue in constant currency terms — or revenue without taking into account fluctuations in currencies — rose by more than five percent for the seventh quarter in a row. Its EBITDA margin came in above 20 percent for an eighth straight quarter.
Mindtree not only delivered strong revenues but also maintained its EBITDA margin at a healthy 21 percent despite wage hikes across the board, said Debashis Chatterjee, CEO and MD, Mindtree.
"Our robust performance in the second quarter of FY23 (April 2022-March 2023) marked a solid first half of the year,” he said.
The financial results of Mindtree — India's seventh largest software exporter by market value — come close on the heels of
TCS kicking off the earnings season on a strong note. Indian IT companies have been struggling against high levels of attrition eating into their margins despite robust demand for technology across sectors.
Mindtree's EBIT margin — a key measure of profitability — slipped by seven basis points on a quarter-on-quarter basis to 19.13 percent. Analysts polled by CNBC-TV18 had estimated the margin to be at 18.2 percent.
"Notably, with an order book of $518 million, our H1 (April-September) signings crossed $1 billion for the first time in our history, thanks to our ability to help our clients address digital transformation’s dual objectives of revenue maximisation and cost optimisation," Chatterjee added.
Attrition at Mindtree eased to 17.7 percent in the July-September period, from 24.5 percent in the previous quarter. The company said it had 38,290 professionals as of September 30, 2022.
Mindtree took the total number of active clients to 276 at the end of September, with the addition of three clients in the $5 million-plus category and 15 clients in the $1 million-plus category.
Mindtree succumbed to selling pressure ahead of the earnings announcement.
