Mindtree's top client now accounts for one-third of its revenues

KEY HIGHLIGHTS

• Mindtree's top 10 clients grow to form 52% of the overall revenues
• Deal closure of $391 million in Q1 FY21, 6 new clients added
• Currencies brings 80 bps comfort, operating margins in June quarter at 18.2%

Bengaluru-based mid-tier IT firm Mindtree posted revenues of $253.2 million for the quarter ended June 30, 2020, a 4.1 per cent growth year-on-year. The company's operating margin for the quarter stood at 18.2 per cent, an expansion of 110 basis points (bps) over previous quarter, with bulk of it - 80bps - coming from currency, and the rest from operational efficiency. Mindtree closed deals worth $391 million and added six new clients in the first quarter of FY21.

Debashis Chatterjee, Chief Executive Officer and Managing Director of Mindtree, said, "Our measure to deep mine the accounts continue to show the desired outcomes of healthy order wins". The company also said it added 740 people at the gross level.

ALSO READ: Mindtree Q1 profit more than doubles to Rs 213 crore, revenue up 4%

Mindtree further grew it's top 10 client accounts, which now account for 52 per cent of the overall revenues of the company. Out of them, just the top one client contributes 30 per cent to the company's revenue. While analysts have always pointed out the over dependence on top client, Mindtree said that particularly in the past quarter, the top client saw a surge in activity, which resulted revenue share of the client increase from 24.8 percent in the last quarter of FY20 to 30.1 in Q1 of FY21.

"Our desire is to do deeper mining into these accounts so that we can have the top clients grow and at the same time focus on the growth of other strategic clients as well," said Chatterjeee. The Mindtree CEO further added that the company was looking at rationalising smaller clients and would defocus from them where synergies are lower.

Mindtree also said it has seen deals of longer tenure (more than one year) being signed and conversion of some of the existing clients being extended. During the first quarter, the company bagged a multi-year global infrastructure services engagement from an existing client and couple of new deals with clients to implement sales force based solutions.

ALSO READ: Mindtree appoints Vinit Teredesai as CFO