IT services firm Mindtree, which is now controlled by engineering and construction major Larsen & Toubro, has reported 41.4 per cent decline in its net profit at Rs 92.70 crore for the first quarter ended June 30, 2019, compared to Rs 158.20 crore in the same period last year. On a quarterly basis, the profit declined 53.3 per cent as against Rs 198.40 crore in March quarter.
The revenue of the mid-sized IT services company grew by 11.9 per cent year-on-year (YoY) to Rs 1,834.20 crore in Q1FY20 versus Rs 1,639.50 crore in Q1FY19, but was down 0.3 per cent on the quarter-on-quarter basis at Rs 1,839.40 crore.
In dollar terms, Mindtree reported a net profit of USD 13.4 million in Q1, down 42.7 per cent year-on-year, while revenue grew by 9.4 per cent y-o-y to USD 264.2 million. The company has reported constant currency growth of 10.3 per cent on a y-o-y basis.
The operating profit or earnings before interest, tax, depreciation and amortization (EBITDA) slipped by 20.3 per cent to Rs 184.10 crore as compared to Rs 231 crore in the same period last year. The EBITDA margin contracted to 10 per cent versus 14.1 per cent in the year-ago period.
Mindtree's attrition rate was 15.1 per cent in the last twelve months. As of June 30, 2019, the total employee strength of the company was 20,935. The company had 346 active clients at the end of June 2019.
This was the first corporate announcement by the company since L&T acquired 60.06 per cent stake in the company. In its 20th annual general meeting (AGM) on Tuesday, the shareholders of Mindtree, including the new promoter L&T, approved the proposal for a special dividend of Rs 20 per share for FY2019.
Commenting on Q1 earnings, Rostow Ravanan, Mindtree CEO and Managing Director said the company has delivered stable results despite many uncertainties.
"This quarter saw us achieve an all-time high contract closure which sets the pace for the rest of the year. While the external factors pose some challenges, nonetheless our focussed strategy and strong client relationships make us confident of delivering above Industry growth rates in FY 20 as well," Ravanan added.
In a separate development, the company announced that the nomination and remuneration committee and its board have appointed L&T Group's non-executive chairman Anilkumar Manibhai Naik as the non-executive chairman of the company with effect from July 18, 2019.
Ahead of the earnings announcement, shares of Mindtree closed trade at Rs 751.95 apiece, up 0.35 per cent, on the Bombay Stock Exchange. The company released its first-quarter earnings report post-market trading hours on Wednesday.
Edited by Chitranjan Kumar