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  • 19 Apr 2022
  • ICICIdirect Research

MINDTREE REPORTS STEADY Q4 NUMBERS

MINDTREE - 3429 Change: 0.40 (0.01 %)

News: Mindtree reported constant currency growth of 5.2% QoQ while dollar revenue growth was 4.7% QoQ to US$384 million (mn). The growth was driven by technology, media & services (up 5.2% QoQ), BFSI (up 8.9% QoQ) and travel & hospitality (up 9.3% QoQ) while retail reported decline of 2.6% QoQ due to ramp down in retail client. In terms of geographies, revenues growth was led by the US and RoW, which was up 5.6% QoQ and 8.5% QoQ. Among client profile, revenue growth was led by top customer as well as Top 2-5 customers, which grew 4.7% and 7.7% QoQ, respectively. The company registered EBIT margin of 18.9% , down 30 bps QoQ due to 6.3% QoQ increase in employee expenses. The deal pipeline is up 8.9% QoQ (up 4.0% YoY) to US$390 million. The company added 3,112 employees in the quarter, taking its base to 35,071 in FY22 while utilisation improved by 160 bps QoQ to 83.1%. LTM attrition increased 190 bps to 23.8% now

Views: The company’s revenue growth largely came in from continued client spending as well continued traction in its top clients. The revenue growth for Q4 was also a function of improved utilization (by 170 bps QoQ . The order book  of US$1.6 bn (which continued to rise over the year) provides visibility of healthy revenue growth ahead. The company reported 20.9% EBITDA margin ( vs. guidance of 20%+) for FY22 despite continued costs pressure amid demand supply mismatch. It continued to guide for 20%+ EBITDA margin for the medium term, which would be supported by revenue growth, right pricing (especially for niche skills), pyramid optimisation ( 1500 freshers were being added per quarter, they are looking to ramp up fresher hiring in FY23) and discipline in sub-contractor costs

Impact: Positive