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Motilal Oswal Report
Mindtree Ltd. reported Q2 FY23 revenue of $422 million (up 7.2% QoQ in constant currency), 210 basis points ahead of our estimate. Reported U.S. dollar revenue grew 5.7% QoQ, driven by broad-based growth across verticals, with retail, consumer packaged goods and manufacturing (up 2.9% QoQ in CC) back in growth track.
Deal total contract value in Q2 FY23 was strong at $518 million, up 44% YoY, and aided the company surpass $1 billion TCV in H1 FY23.
Ebitda margin contracted 10 bps QoQ (50 bps ahead of our estimate) to 21.0%, despite the full impact of wage hikes during the quarter.
Mindtree was able to compensate for this through operational efficiency, currency support and reversal of a one-off cost last quarter. Utilization (down 50 bps QoQ) and attrition (decline of 40 bps QoQ to 24.1%) were broadly stable.
Mindtree's management indicated that it has started to witness some softness and caution in parts of the business (especially in Europe), although these appear to be transitory in its opinion.
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