Mindtree announced its results for the third quarter yesterday. On a quarterly basis, the company made a profit of Rs 437.5 crore in the December 2021 quarter, while the company had a profit of Rs 398.9 crore in the September 2021 quarter. The company’s income for the quarter increased to Rs 2,750 crore from Rs 2,586.2 crore. Mindtree CFO Vinit Teredesai spoke to CNBC-Awaaz after the company’s results today. In this discussion, he talked in detail about the company’s demand cycle, attrition, slow deals, impact of COVID, margins and next year guidance. Here are the key excerpts from his conversation:
Less than expected results in the third quarter
Vineet said on this that for the fourth consecutive quarter, the currency growth was seen above 5%. The company has always been under a bit of pressure in Q3. But earnings are expected to rise again in Q4. There doesn’t seem to be any reduction in demand for the company. The company has achieved the growth target of 30%. Further, the growth of the company is expected to increase further in Q4. let you know
The company’s margin has also increased in Q3 and the company is hiring freshers.
how was the demand cycle
Responding to this, the company’s CFO said that the impact of Corona on the business of the company was visible as well as there was a boom in pent-up demand. The current demand as seen at the moment is made for the long term. We are committed to provide the best service to our customers. The digital channel is evolving for the company at many levels. The development of the digital channel will benefit the customer, the company. At present, the country is in the digital transformation stage, although many things are yet to be digitally transformed.
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The problem of the entire industry is ATTRITION
Talking about attrition, he said that this is the problem of the entire industry. Everyone knows that there is attrition in all industries. At present, both new and experienced people are getting jobs. However, the company is hiring more freshers because freshers get accustomed to the company’s situation quickly. Apart from this, freshers work with more hard work, dedication and freshers stay in the company for a long time.
Vineet further said that we try to keep 1000-1500 freshers in every quarter. We are also working to ensure that people do not leave the company. Under this, the company has incremented people twice a year. We believe that the situation will improve in the next 2-3 years. But attrition is not good for any industry.
slowdown in the deal
Responding to the slowdown in the deal, Vineet said that the company has done 12% more deals. The company has an order book of $1.2 billion this year. The company has long and short term customers. The contract value of the company has also been good. It is believed that good growth is not possible without a good contract value.
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Outperformance in margin
On the margin outperformance, Vineet said that the company is also providing jobs and training to the freshers. Margins improved on account of balancing by the company. Along with this the sub-contracting cost has also come down. Earlier in Q1 the sub-contractors had increased and margins decreased. But the sub-contracting cost has not increased in the last two quarters and the depreciation of the rupee has also benefited the company.
How will be the guidance for the fiscal year 2022?
Vinit Teredesai said that this year we have achieved more than 30% growth rate. Further, with the increase in demand, the growth of the company will also increase. We do not see any reduction in demand. Not only this, more growth is expected in the next 2-3 years.
how was the effect of covid
Vineet said that corona does not have an effect in the short term. Corona has had an impact on business in Q1FY21. But the company has grown even during the Corona period. At present, the income of the travel sector has reached the level of pre-pendemic. There has been a lot of diversification in the travel sector. Our earlier focus was on airlines, hotel industry. Now our focus has shifted to the Fleet, Car Rental Industry. Anyway, the company has all kinds of clients. So far Omicron has not shown any harmful effects.