Strong Topline and bottom-line growth but margins were affected on QoQ basis due to high attrition | Mindtree Q4FY22 Conference Call Highlights

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  • Q4FY22: In USD: Revenue was $383.8 million (growth of 4.8% q-o-q / 33.2% y-o-y). Net profit was $62.7 million (growth of 7.6% q-o-q / 44.8% y-o-y). In INR: Revenue was ₹2,897 Cr (growth of 5.4% q-o-q / 37.4 % y-o-y). Net profit was ₹473.1 Cr (growth of 8.1% q-o-q / 49.1 % y-o-y)
  • FY22: In USD: Revenue was $1,410.8 million (growth of 31.1%). Net profit was $221.6 million (growth of 47.7%). In INR: Revenue was ₹10,525 Cr (growth of 32.1%). Net profit was ₹1,653 Cr (growth of 48.8%).
  • EBITDA margin of 21% declined 50 bps sequentially. Headwinds from retention costs and backfill of high attrition were partially offset by higher utilization and marginal benefits from the offshore mix, subcontractor costs and Rupee depreciation. Lower amortization, higher forex gains, and lower tax rate increased the net profit level.
  • Verticals: 1.) Communication Media and Technology (CMT): Growth was driven by strong discretionary spending around themes such as product engineering, commerce, and digital marketing, enterprise IT platform development, and cyber security. (2) Retail: Revenue decline was on account of the ramp down in a retail account. Demand is strong and led by spending on omnichannel and hyper-connected experiences, real-time insights, and a 360-degree view of the customer. (3) BFSI: Mindtree is targeting Tier 1 financial institutions in the US, Continental Europe, and Australia. (4) Travel: Demand is healthy across Mindtree’s service offerings. New clients are ramping up fast, potentially large accounts. Expansion into adjacent sub-verticals such as food and beverage and surface transformation is yielding good results.
  • Clients: 276 active clients as of March 31, 2022. $5 million+ clients increased by 4, a total 56.  $20 million+ clients increased by 5, a total of 14
  • People: 35,071 professionals as of March 31, 2022. Trailing 12 months attrition was 23.8% from 21.9% in Q3FY22.
  • 80-82% is a comfortable range of utilization for the company
  • 90% of the revenues come from top 100 focused accounts. Tail account rationalization will continue.
  • Total contract value (TCV) increased 9% qoq and 4% yoy to US$390 mn.
  • The management has increased investments in new-age technologies like Metaverse, Blockchain, AR/VR, and low code – no code.
  • FY23 Guidance: Industry leading growth, Operating Margins (20%+).

Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell stocks or MF.

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