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In its 20th year, while battling a takeover bid from L&T, Mindtreehas crossed the $1 billion-mark in revenues.
It has also announced a 50 per cent special dividend in one of its largest payouts.
The company’s board of directors has declared an interim dividend of 30 per cent or ₹3 per equity share of ₹10 each.
Additionally, the Board has also recommended a 40 per cent final dividend — or ₹4 per share — and a special dividend of 200 per cent (₹20 per share).
Mindtree’s CEO and Managing Director Rostow Ravanan said that the goodies to shareholders were to celebrate the twin achievements of exceeding $1 billion in annual revenues and the 20th anniversary of the company.
These incentives are subject to shareholder approvals.
The record date for payment of the interim dividend is April 27, and registered shareholders will be paid before May 10, the company said.
The share price angle
Interestingly, this development comes at a time when the mid-sized company is locked in a bitter battle with L&T, which, after acquiring V G Siddartha’s stake of 20 per cent, has made an open offer in a bid to get majority stake.
L&T has publicly said that it aims to acquire 66 per cent in Mindtree.
However, Ravanan told BusinessLine that the dividends are in no way connected to L&T’s bid, and that this is not an effort to push up the prices.
“Our stated practice is to declare dividends at the end of a fiscal, and this happens to be a special one,” he said.
If the shareholders give their nod, Mindtree will give out ₹530 crore in the form of dividends. It has total cash equivalent of ₹1,050 crore.
Also, over the last decade, Mindtree has announced interim dividends in the range of 10-50 per cent, with higher final dividends at times.
Strong performance
The performance of the mid-sized company has been strong and it expects to grow in the low teens in fiscal 2020. For the quarter ended March 2019, Mindtree has reported a net profit of ₹198.4 crore, an 8.8 per cent increase over ₹182.2 crore it posted in the year-ago quarter.
For the financial year 2019, the net profit was ₹754.1 crore, a 32 per cent increase compared to the ₹569.9 crore it posted in fiscal 2018.
On a sequential basis, the net profit went up 3.6 per cent compared to ₹191.3 crore the company posted in the quarter ended December.
The profit was bolstered by increased traction in its digital business, whose contribution to the total revenues has crossed 50 per cent. It also impacted the margins positively.
Revenues for the March ended quarter was ₹1,839.40 crore, a 25.7 per cent jump from the year-ago period ( ₹1,464 crore).
On a sequential basis, this is a 2.9 per cent jump when compared to ₹1,787.2 crore in the December-ended quarter.
EDITDA went up 19 per cent year on year, but EBITDA margin went down 90 basis points to 15.2 per cent at the end of the fourth quarter.
During the year, Mindtree also crossed the 20,000 employees mark and bagged multi-year multi-million dollar deals.
However, its attrition was 14.2 per cent, marginally up at the end of the fourth quarter.
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