Mindtree Q2 results
Last updated: 15 Oct, 2020 | 04:35 pm
- Profit rises: Mindtree has reported a 19.1% on-quarter rise in consolidated net profit to ₹253.7 crore in Q2FY21, in-line with analyst estimates. Analysts had earlier estimated a profit of about ₹240 crore.
- Revenue below expectations: Mindtree’s revenue grew by a tepid 0.9% QoQ to ₹1,926 crore, mainly due to a drop in revenue from Communications, Media and Technology segment. Analysts had earlier anticipated a revenue of about 1,970 crore. The table below shows Mindtree’s revenue growth across various verticals.
- Operational margins improve: The EBIT margin improved during the quarter from 15.1% to 16.7%. The company’s key ratios including Net Profit Margin Return on Equity have also seen a recovery in the quarter. The company won the deals worth $303 million in the second quarter.
- Interim dividend: Mindtree has declared an interim dividend of ₹7.5 per equity share and fixed October 27, 2020, as the record date.
While Mindtree’s EBIT, margins and Net Profit have met expectations, the topline has come in below estimates. This was because Mindtree’s revenues from its mainstay industry group — communications, media and technology — witnessed tepid a contraction in the quarter. This industry group makes up for nearly 50% of its revenues, but growth in rupee terms QoQ was (-1.4%).
The Covid-19 pandemic has forced a tectonic shift in businesses processes to move towards greater digitization. This has helped the IT sector to bounce back faster than other industries. The growth in Q2FY21 has improved visibility for the rest of the year for Mindtree. However, the margin recovery has been below larger industry peers Infosys and TCS in the quarter.