Mindtree to roll out salary hikes from Jan 1 after net profit rises 87.9% in Q2

The board of directors has also declared an interim dividend of Rs 7.5 per share.
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IT firm Mindtree on Thursday posted a 87.9% rise in consolidated net profit to Rs 253.7 crore for the September 2020 quarter, and said it was confident of continuing its growth momentum.

The company, which had registered a net profit of Rs 135 crore in the September 2019 quarter, will also roll out salary hikes with effect from January 1, 2021.

The Bengaluru-based company saw its revenue grow marginally to Rs 1,926 crore in the September 2020 quarter from Rs 1,914.3 crore in the year-ago period.

The company attributed the strong growth in profits to operational efficiencies.

"The world is slowly emerging from the challenges caused by the pandemic...we achieved our commitment of delivering profitable growth, quarter-over-quarter, and also successfully navigating through the challenging business environment," Mindtree Chief Executive Officer and Managing Director Debashis Chatterjee told reporters in a virtual briefing.

He added that the company's pipeline continues to be strong. "Also, with the broad growth, we are also seeing a healthy win ratio."

He also said that on the demand side, the company is seeing momentum as customers are looking for solutions to tackle near-term challenges as well as embark on a transformational journey for future growth.

"We anticipate growth momentum for the next quarter, despite it being a seasonally weak quarter, with revenue momentum on track and our continued focus on driving operational efficiencies," he said.

Chatterjee said the company has a healthy orderbook of USD 694 million (in first half) and has a robust pipeline also. "We are optimistic to continue our growth momentum in the third quarter."

The firm signed deals with total contract value (TCV) worth USD 303 million in the second quarter.

Chatterjee noted the company completed its promotion cycle in the second quarter, and will undertake salary increments effective January 1, 2021.

He added that the increase will be in line with industry standards, and that the company will continue to hire based on business requirements.

Mindtree had 21,827 employees at the end of the September quarter with trailing 12-month attrition at 13.8 per cent.

In dollar terms, net profit rose 79.2 per cent to USD 34.3 million, while revenue declined by 3.7 per cent to USD 261 million in the September 2020 quarter over the year-ago period. At the end of the September 2020 quarter, the company''s active client base stood at 283, and eight new clients were added during the quarter, the filing said.

The board of directors has declared an interim dividend of Rs 7.5 per equity share.

North America market contributed 77.4 per cent of Mindtree''s revenue in the September 2020 quarter, while Continental Europe, UK and Ireland, and Asia Pacific contributed 7.5 per cent, 7.9 per cent and 7.2 per cent, respectively.

Shares of Mindtree on Thursday closed at Rs 1,427.55 apiece on the BSE, down 8.11 per cent from its previous close.

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