COVID-19: Mindtree sees high single-digit decline in dollar revenue growth during Q1

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COVID-19: Mindtree sees high single-digit decline in dollar revenue growth during Q1
New Delhi, Jun 12 () IT firm Mindtree on Friday said it expects "high single-digit decline" in overall revenue growth in dollar terms in the first quarter of 2020-21 as compared to the preceding quarter on account of disruptions caused by the COVID-19 pandemic.

The Bengaluru-based company said it is well-equipped to handle the global crisis based on the business continuity plan that it has implemented, and expects its second-quarter numbers to be better than that of the June quarter.

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"COVID-19 outbreak has been creating unprecedented level of uncertainty with major economies virtually coming to a halt... The travel, transport and hospitality (TTH) segment is at the front line of today's pandemic situation," Mindtree said in a regulatory filing.

The company said it expects to see near-term impact coming from TTH that contributed 16 per cent of its revenues in the March 2020 quarter.

"Based on the current assessment and visibility, we expect high single-digit decline in overall revenue growth (in dollar terms) for Q1FY21 as compared to Q4FY20," it said.

Mindtree said it is seeing increasing demand in other segments such as communication, media and technology (CMT), and consumer packaged goods (CPG). "Accordingly, we expect our Q2FY21 revenues better than Q1FY21," it added.

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The company said it is in conversation with clients to carve out specific offerings along with right commercial models to help clients sail through the current pandemic situation.

"We expect demand from our clients for digital and transformational services as they invest into data, cloud-enabled solutions, customer-centric and end user experience businesses," it said.

Mindtree stated that its focus would be on signing multi-year annuity deals, rationalising tail-accounts and going deeper into the limited set of strategic clients.

"Accordingly, we expect the topline recovery to fructify during second half of 2020-21. Despite near-term challenges on the revenue, through various cost-optimisation measures, we expect our Q1FY21 margin to hold at Q4FY20 levels," it added.

Mindtree said it has a robust balance sheet and liquidity position with cash and investments of Rs 1,361.8 crore as on March 31, 2020, with good visibility of additional cash flow generation in 2020-21.

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Mindtree's revenue grew 6.3 per cent year-on-year to USD 278.4 million in the March 2020 quarter.

It added that given the near-term challenges in the revenue, it has implemented additional cost-optimisation measures including deferred salary hikes, optimising sub-contractors expenses and limiting discretionary spends to contain the impact on the profitability. SR HRS
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