Mindtree, a global technology and consulting services company, reported strong revenue and net profit growth for FY22 even as the management refused to comment on a possible merger with L&T Infotech (LTI).

For the quarter ended March 31, Mindtree reported revenues of $383.8 million (₹2,897.4 crore), a quarter-on-quarter growth of 4.8 per cent, and a net profit of $62.7 million (₹473.1 crore), a growth of 7.6 per cent over the previous quarter.

For the full year FY22 Mindtree’s revenues grew by 31.1 percent to $1.41 billion (₹10,525.3 crore) and net profit increased by 47.7 per cent to $221.6 million (₹1,652.9 crore).

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Market speculation

CEO and MD of Mindtree Debashis Chatterjee, however, refused to comment on market speculation of a possible merger between his company and LTI. Earlier on Monday, Bloomberg had reported that Larsen & Toubro, which owns 61 per cent of Mindtree and 74 per cent of LTI, was contemplating merging the two companies.

“We don’t comment on speculation,” said Chatterjee, in response to question about the possible merger.

Both L&T Group and LTI — which is set to announce its results on Tuesday — have also refused to comment on the possible merger between the two companies. If done, the combined entity will have a market capitalisation of more than $23 billion.

‘Complementary merger’

The merger speculation has swirled ever since L&T Group successfully mounted a hostile takeover of Mindtree in 2019.

A former senior executive of Mindtree who did not wish to be identified told Business Line, “There are some advantages to the merger as the new entity will have the heft to bid for bigger and more complex projects. Also LTI has greater strength in BFSI while Mindtree has traditionally been strong in retail, media and communication; so, it will be complementary. However, several issues, including integration at a time of churn in the marketplace, is going to be challenging. Issues like who will lead the new entity — whether DC (Debashis Chatterjee) or Sanjay (Jalona) — remains to be seen.”    

High attrition rate

Mindtree, which had 35,071 employees as of March 31, 2022, has also seen its trailing twelve-month attrition hit a high of 23.8 per cent. However, the management, in its commentary, said this was “an industry wide phenomenon and we are taking measures to address it”.

In line with the larger market, shares of Mindtree were trading 3.27 percent lower on the BSE while LTI’s shares were down by 2.46 percent.

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