BENGALURU: While macroeconomic indicators are hinting at near-term softness in certain sectors, IT services company Mindtree expects that softness to be transient. Venu Lambu, Executive Director and President, Global Markets, Mindtree, told TNIE that market volatility is known to fuel a surge in demand for technology, and the current period of volatility is unlikely to be an exception.
The IT company reported a 27.5% increase in its consolidated net profit for the second quarter at Rs 509 crore, and it maintained its EBITDA margin at 21%. “Our strong performance this quarter reaffirms that our capabilities and offerings are resonating well with our clients. For enterprises across sectors, technology-led interventions to improve customer experiences, boost revenues, and optimise costs continue to be integral to growth and competitiveness,” he said.
While North America posted a 29.4% increase in growth, both Continental Europe, UK & Ireland reported 6.6% and 26.7% dip, respectively in growth compared to the previous year. Lambu said, “As a result of pockets of softness within Europe, programmes focused on cost optimisation are being prioritised.”
He also added that they expect wages to stabilise over the next few quarters. As far as the LTI-Mindtree merger is concerned, the executive director said they are making good and meaningful progress with the merger, and are in the last leg of regulatory approvals. “We expect to close the merger before the end of this calendar year,” he said.
When asked about moonlighting, Lambu said the company’s employee contracts do not allow moonlighting because that presents a substantial risk to clients’ business interests. In the first half of this fiscal year, Mindtree hired 3,000 fresh graduates, and now the company is looking at hiring plans from the perspective of the increased capacity and economy of scale that the merger of Mindtree and LTI will present.
“We expect hiring to continue at a steady rate, while accounting for talent synergies between the two merging companies,” he said. Mindtree’s trailing 12 months attrition was 24.1%, and the company believes that there is room for it to trend down further. Talking about the return-to-office programme, he said all offices are now operational, and over a third of its employees are working from the office in a staggered manner for two to three days a week, depending on client and project needs.
Q2 Results
Mindtree reported a 27.5% increase in net profit for Q2 at Rs 509 crore
It maintained EBITDA margin at 21%
Q3 is a seasonally weak quarter for Mindtree
It witnessed 20.4% Y-o-Y revenue growth for Top 10 clients
LTI-Mindtree merger is in the last leg of regulatory approvals