Midcap IT company Mindtree surpassed expectations when its second-quarter net increased 7.9 percent from the prior quarter and 27.5 percent from a year earlier. The last time Mindtree declares earnings as a standalone entity might be this quarter. By the end of 2022, the L&T Infotech merger, which was officially announced in May 2022, is expected to be completed.
Considering the upcoming merger, Mindtree's recruiting was slightly lower. Attrition is still high at 24.1% but has begun to decline.
Debashis Chatterjee, CEO of Mindtree, spoke with Moneycontrol's Haripriya Suresh and Chandra R Srikanth about demand, the merger timeframe, ambitions for the merged entity, and moonlighting. Edited excerpts:
One of the things we were prepared for was clients shifting their efficiency focus. Deals that involve transformation typically involve the client's revenue maximized, and many of these deals occurred over the past two years. Customers have also been discussing efficiency packages, which are managed services since some attitudes have changed.
Both are in our order book for Q2; there is a decent mix of efficiency offers to return. This is a really good thing since we can play on both sides.
There are some specific clients for whom we had a slight ramp-down, as we mentioned throughout the previous two quarters. In RCM [retail, consumer products, and manufacturing], for instance, there is a loss in reported currency, but an increase of 2.9 percent is seen in constant currency. Therefore, we are optimistic that the worst is over.
Since RCM contains our exposure to Europe and currency has been a major factor in Europe, it is obvious that a sizable percentage of this decline is substantial. The narrative is still ongoing in CMT (communications, media, and technology). CMT's performance was flat, but this time due to exposure in Europe.