Mindtree Q1 results | Order book remains strong; cautiously optimistic, says CEO

Mindtree

Mindtree saw its net headcount go up by 2,384 on a quarter-on-quarter basis in Q1FY23 to 37,455 people as on June 30, CEO Debashis Chatterjee said. During that time period, the company onboarded more than 4,700 people including 1,500-plus fresh graduates. The CEO added that as far as hiring is concerned, the company is continuing with its plan of recruiting at least 1,500 freshers every quarter.

Mindtree, which announced its results for Q1FY23 on July 13, saw net profit go up by 37.3 percent year on year. The company saw its highest-ever order book of $570 million during the quarter, with $10-million-plus clients up by 3 to 35, and $20 million-plus clients increased by 4 to 18. 

Attrition rose to 24.5 percent, up from 23.8 percent last quarter on a last twelve months basis. In the year-ago period, attrition was 13.7 percent. The CEO said this was consistent with the company's previous view, and will take a few more months to stabilise. 

“There is nothing to stop us from hiring more people depending on the pipeline and demand that we have, but also the situation of the supply as well. Given the scenario that we have in terms of higher attrition not only at Mindtree but across the industry, there have been some challenges in terms of getting more additions but our endeavour is to add more and more because overall pipeline still looks fairly robust,” Chatterjee said.

He added that as part of a training programme to prepare early career talent for client projects, over 2,500 students in the last semester of their engineering degree programmes are being trained in various technology tracks and will be ready to build soon after they join.

The company’s leadership said they were ‘cautiously optimistic’ amid macroeconomic uncertainties, with the CEO saying that there are a few industries where they have seen delays in terms of a few deals, and some deals getting pushed as well. 

“While there are no indications of any significant change in client behaviour, we are closely watching macroeconomic developments and continue to be cautiously optimistic about the opportunities created by the need to balance cost and digital imperatives with an eye on the future,” Chatterjee said. 

He added that market cycles may momentarily affect the pace of decision making in certain sectors, but it is “unlikely to reverse or stall the wave of business-critical modernisation that is increasingly becoming key to survival”.

“Our experience shows that technology and technology-led innovation are often the antidotes to macroeconomic challenges. In fact, economic headwinds are known to spur organisations free of dollars, from pockets of inefficiency and redeploy them on initiatives with assured ROI,” he said.

Merger

In May, Mindtree and L&T Infotech announced their merger, both subsidiaries of the Larsen & Toubro group. The merger is likely to be completed by the end of the fiscal, with Chatterjee as the head of the combined entity. 

“We are pretty much in line with our expectations of the timeline for this kind of a merger. The normal timelines are anywhere in the range of six to nine months from the date of announcement, which in our case is May 6. But we are optimistic that it can happen prior to that as well,” Chatterjee said.

Mindtree share price fell 2 percent in the early trade on July 14 - a day after the company posted better numbers for the quarter ended June 2022. At 9:50am, Mindtree was quoting at Rs 2,816.75, down Rs 83.85, or 2.89 percent on the NSE.