Mindtree Q4 net profit up 4% to Rs 206 crore, flags coronavirus concerns

Currently, L&T is pursuing market purchase of Mindtree shares to increase its stake in the IT firm
Mid-tier IT services company Mindtree on Friday reported inline performance in the fourth quarter ended March 2020 (Q4FY20), though the firm joined its bigger peers in flagging slowdown concerns this financial year owing to the Covid-19 crisis.

For Q4FY20, Mindtree posted a net profit of Rs 206.2 crore, a rise of 3.9 per cent year-on-year basis and 4.7 per cent sequentially.

Revenues of the firm grew 11.5 per cent to Rs 2,050.5 crore during this period. Revenues were at $278.4 million, a 1.9 per cent rise in constant currency term over the previous quarter. Operating margin of the Bengaluru-headquartered firm improved 150 basis points sequentially to 17.1 per cent in Q4FY20.

Mindtree, which announced its results for the whole financial year first time under L&T’s ownership, posted a net profit of Rs 630.9 crore, a decline of 16.3 per cent for FY20. Its revenue grew 10.6 per cent to Rs 7,764.3 crore. In dollar term, the IT firm crossed a billion dollar revenue mark as its top line stood at $1.08 billion for FY20.

In constant currency term, the revenue growth was 9.4 per cent during the last financial year. The firm said it had the highest deal wins of $1.2 billion during this period. However, like its peers, the company expects softness in demand in FY21.

“Looking ahead, we anticipate softness in demand in FY21 due to the unprecedented Covid-19 pandemic. However, we are equipped to handle the global crisis and remain confident that we will continue to create value for our clients, drive profitable growth,” said Debashis Chatterjee, chief executive officer and managing director at Mindtree.

He said the company would see softness in demand in travel & hospitality, retail and manufacturing in the first quarter of this financial year, apart from some deferment in spends in digital services segment. “However, we see more demand in hi-tech and CPG segments,” said Chatterjee.

During Q4FY20, the headcount of Mindtree increased by 430 people to 21,991 with its attrition rate increasing by 20 basis points to 17.4 per cent in this period. “We will honour all our commitments as far as offer letters are concerned. On holding back hikes and promotion, we will take call as the situation evolves,” the CEO said.


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