Mindtree has been carrying out several measures to keep the costs and margins in check even as attrition rate has been climbing up for mid-tier services company and the entire IT industry as a whole. It expects the attrition to stabilise over the next 2-3 quarters as it continues to aggressively hire freshers.
Mindtree Managing Director and CEO Debashis Chatterjee told BusinessLine that because of the wage hike, the company had to absorb 140 basis points of EBITDA and 30 basis points in terms of currency. The trailing attrition rate for 12 months for the company has gone up sharply to 17.7 per cent.
“The increase in attrition rate is something we are keeping a close watch on. There are a lot of things we have done as part of the overall operational efficiency measures for eight quarters now. This has helped us to keep the costs and margins in check and we have conducted several employee engagement exercises. We have increased the fresher hiring significantly and to build additional supplies in digital technologies, MTCL has launched career development programmes and a unique learn-and-earn programme (Mindtree Edge) for BSc and BCA graduates in collaboration with BITS Pilani,” he said.
Cutting-edge technology
He also said the kind of projects the company does for its clients are all cutting-edge technology and this in itself attracts a lot of talent. He said the growth during the first half of this fiscal has laid a very strong foundation for industry-leading growth. The growth has been broad-based across industry lines and geographies.
“One strategy that is really working very well for us is of course cross-selling and upselling into the strategic set of clients. This quarter, excluding the top client, the top 20 clients have grown 90 per cent quarter-on-quarter. We were probably not doing it 18 months back,” Chatterjee said.
He pointed out that the company needs to demonstrate profitable and industry level growth and the momentum is well set and said “we will accelerate as we go along.”
Among the industry verticals, Mindtree has started focusing on healthcare as well. The BFSI segment which has been a laggard two quarters back has witnessed healthy growth and has grown by 8.9 per cent. The travel vertical revenues are almost the same as pre-pandemic levels. “The top client in terms of year-on-year growth is 12.8 per cent even though on a sequential basis it has been flat. We have been focusing a lot on Europe and have invested a lot in building the leadership there. Europe and the UK together have a run rate of $250 million and the US has a run rate of $1 billion this quarter,” the Mindtree MD & CEO pointed out.
Mindtree reported a net profit of ₹398.9 crore posting an increase of 57.2 per cent on a year-on-year basis on the back of broad-based growth momentum for the second quarter of the current fiscal. On a sequential basis, it grew 16.2 per cent.
Revenues rose 34.3 per cent to ₹2,586.2 crore on a year on year basis and 12.9 per cent on a quarter-on-quarter basis. The revenue in dollar terms was $350.1 million, an increase of 12.7 per cent sequential growth and 34.1 per cent on a year on year basis. The net profit was $54 million, a growth of 16 per cent and 57.3 per cent on a year on year basis.