MindTree Ltd - Q4FY22 First Cut - ICICI Direct

Mindtree reported slightly better numbers on CC revenues while margins were better than our expectations. The company reported constant currency growth of 5.2% QoQ (vs our expectations of 5%) while dollar revenue growth of 4.7%QoQ, was in line with our expectations. The company registered EBIT margin of 18.9% (down 30 bps QoQ), was better than our expectations of 18.4%. The growth was driven by Technology, Media & Services (up 5.2% QoQ), BFSI (up 8.9% QoQ) and Travel & hospitality (up 9.3% QoQ). In terms of geographies, the growth in revenues was led by US and RoW which was up 5.6% QoQ and 8.5% QoQ. Among client profile, revenue growth was led by top 5 clients, which was up 5.6% QoQ. The deal pipeline is up 8.9% QoQ (up 4.0% YoY) to US$390 million. The company added 3,112 employees in the quarter, taking its base to 35,071 at FY22 while utilization improved by 160 bps QoQ to 83.1%. LTM attrition increased by 190 bps to 23.8% now.

Q4FY22 Earnings Summary

- Revenue in CC terms grew by 5.2% QoQ while US$ revenues grew 4.7% QoQ to $383 million (largely in line with our estimates) . For full year, Revenues grew by 32.1% to Rs. 10,525.3 crore

- Revenues in rupees grew 5.4% QoQ to Rs. 2,898 crore, (vs. our estimate of Rs. 2,888 crore)

- EBIT margin declined by 30 bps QoQ to 18.9% (vs our estimate of 18.4%). The margins were better than our expectation on lower than expected SG&A and depreciation

- Reported PAT came in at Rs. 473.1 crores, better than our expectations due to better operating performance

- The company announced full year dividend of Rs. 37 per share

The company's revenue growth largely came in from continued client spending in Technology, Media sector (43% of the mix) as well continued traction in its top clients which is a reflection of strong order book. The growth was also came in because of better utilization for the quarter which improved by 170bps QoQ . The onsite-offshore mix continued to be skewed towards offshore as in last one year, it improved by 340 bps, which is helping in margins in our opinion. We will come out with an update post the earnings call.

Shares of MindTree Limited was last trading in BSE at Rs. 3960.80 as compared to the previous close of Rs. 4097.15. The total number of shares traded during the day was 64237 in over 8239 trades.

The stock hit an intraday high of Rs. 4004.70 and intraday low of 3834.05. The net turnover during the day was Rs. 251909751.00.

Source : Equity Bulls

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MindTree INE018I01017 Q4FY22 FirstCut ICICIDirect