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L&T Chief AM Naik to guide Mindtree

Separately, the software services provider posted muted revenue growth in the first quarter of the current financial year amid the ongoing takeover by the engineering conglomerate

ET Bureau|
Jul 18, 2019, 06.53 AM IST
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The company told analysts in a post-earnings conference call that the special reward, which was about 260 basis points of revenue for the quarter, would be paid on the basis of tenure.
Bengaluru: Mid-tier IT services firm Mindtree has appointed L&T chief AM Naik as non-executive chairman, even as it offered no clarity on key replacements, including the position of chief executive, once founders leave the company.

Separately, the software services provider posted muted revenue growth in the first quarter of the current financial year amid the ongoing takeover by the engineering conglomerate. The company also calibrated its revenue guidance for the full year.

Mindtree also gave its employees a one-time special reward, which cut into the company’s margins.

“The payout on the occasion of Mindtree’s 20th anniversary is an opportunity to recognise every Mindtree Mind’s commitment and contribution to the growth journey.

The promoter payout forms a negligible 0.08% of the total pool,” Mindtree told ET.

The company told analysts in a post-earnings conference call that the special reward, which was about 260 basis points of revenue for the quarter, would be paid on the basis of tenure.

Mindtree’s revenue grew 1.1% sequentially to $264.2 million in constant currency terms, against 8.2% sequentially last year for the same period. Profits dropped 52.7% sequentially to $13.4 million.

It has forecast above-industry average growth for FY20, but expects only marginal improvement in profit during the financial year. “This quarter saw us achieve all-time high contract closures which sets the pace for the rest of the year. While the external factors pose some challenges, nonetheless our focused strategy and strong client relationships make us confident of delivering above industry growth rates in FY20 as well,” outgoing Mindtree CEO Rostow Ravanan said.

The company did not hold a customary call with the media. Mindtree did not respond to a query on when it had decided to make the special reward payout. In response to queries on why the analyst call was not webcast for all investors, Mindtree said it had faced technical difficulties at the time of the call.
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