HomeBusiness NewsCompanies NewsMindtree's profit exceeds Street estimates as revenue growth helps IT firm expand margin

Mindtree's profit exceeds Street estimates as revenue growth helps IT firm expand margin

Mindtree results: Mindtree reported a net profit of Rs 471.6 crore for the April-June period, beating analysts' estimates. The Bengaluru-based IT company surprised the Street with an increase in margin.

By CNBCTV18.com July 14, 2022, 11:55:48 AM IST (Updated)

Mindtree on Wednesday reported a net profit of Rs 471.6 crore for the April-June period, exceeding Street estimates, with a 30 basis-point sequential increase in its margin.

The increase in the margin — a key measure of profitability — is in contrast to the trend in the IT sector, where elevated employee costs thanks to worsening attrition are eating into their ability to generate profits.



Mindtree's revenue for the April-June period increased 7.7 percent to Rs 3,121.1 crore compared with the previous three months, according to a regulatory filing. This is a sixth straight quarter of more than 5 percent revenue growth for the company in constant currency terms.

In dollar terms, its revenue rose 4 percent on a quarter-on-quarter basis to $399.3 million, in line with Street expectations. Analysts in a CNBC-TV18 poll had estimated Mindtree's revenue at $399.5 million.



Growth in revenue in constant currency terms — or revenue without taking into account fluctuations in currencies — came in at 5.5 percent in the three-month period sequentially, as against analysts' estimate of 5-5.1 percent.

“We are excited to report a strong start to the financial year 2022-23 with robust revenue growth, solid margin and a record order book, demonstrating our continued industry-leading growth momentum,” said Debashis
Chatterjee, CEO and Managing Director at Mindtree.

Mindtree clocked an EBIT margin — or a metric determining a company's operating efficiency — of 19.2 percent for the three months to June, as against analysts' estimate of 18.3 percent. Its margin for the previous three months had stood at 18.9 percent.

The attrition rate at Mindtree worsened to 24.5 percent in the three-month period, from 23.8 percent in the March quarter.

"Our highest-ever order book of $570 million reflects the relevance of our value proposition in delivering business-critical transformation at scale," Chatterjee added.

The order book increased 46.2 percent on a quarter-on-quarter basis, and 13.1 percent compared with the three months to June 2021.

Mindtree shares ended higher by Rs 43.9 or 1.5 percent at Rs 2,899.4 apiece on BSE ahead of the earnings announcement.

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