JOIN USMindtree Q1 net profit up 37% at Rs 471.6 crore
Mindtree on Wednesday posted over 37 per cent rise in net profit for June quarter as it remained "confident" of growth momentum for fiscal's first half and cautiously optimistic about the second half.
The IT company's net profit stood at Rs 471.6 crore in April-June quarter, against Rs 343.4 crore in the same period a year ago.
Revenues for the current fiscal's first quarter came in at Rs 3,121.1 crore, logging a growth of over 36 per cent year-on-year.
"A robust Q1 performance has reinforced our confidence in our ability to continue our growth momentum through the foreseeable future," Debashis Chatterjee, Chief Executive Officer and Managing Director of Mindtree, told reporters during the earnings call.
The company said there are no indication yet of any significant change in client behaviour, but that it is closely watching near-term macroeconomic developments and continues to be cautiously optimistic about opportunities created by the need to balance cost and digital imperatives.
The company's highest-ever order book of $570 million reflects the relevance of Mindtree's value proposition in delivering business-critical transformation at scale, Chatterjee added.
The net profit at Rs 471.6 crore translated into a sequential dip of 0.3 per cent when seen quarter-on-quarter (q-o-q) and a growth of 37.3 per cent year-on-year (y-o-y).
Mindtree admitted to "softness in a few pockets" as the retail, CPG (Consumer Packaged Goods) and manufacturing business saw a decline of 8.7 per cent quarter-on-quarter, despite a 15.6 per cent on-year growth in Q1 FY23.
In those pockets of softness there is slightly delayed decision making in some areas, the company said.
In May this year Mindtree and LTI (Larsen & Toubro Infotech), the two software units controlled by a Mumbai-based engineering conglomerate, had announced a mega-merger to create an efficient and scaled-up IT services provider, exceeding $3.5 billion in total revenue.
The stock exchanges have given their no-objection letters on June 16, Chatterjee informed, adding that the merger is now awaiting other regulatory approvals.
The synergies between the two companies are already yielding results.
"A case in point is a large deal that we recently won in partnership with LTI to manage end-to-end development and support for the customer services application of a Europe-based global travel technology company. The deal is driven by a different value proposition," he said.
Further, the company said the feedback from clients and partners about the merger has been "very positive" and that customers are "fairly comfortable" with regard to overall vision laid out for the combination.
Organisations across industries continue to accelerate digital transformation for innovative outcomes, continued differentiation and sustainable growth.
"Digital transformation is not necessarily constrained by market cycles. While they may momentarily affect the pace of decision making, that too in certain sectors, they are unlikely to reverse or stall the large wave of business-critical tech modernisation that is increasingly becoming key to survival," he said.
Technology and technology-led innovations are often antidotes to macro-economic challenges, Chatterjee noted.