Message from CFO


Dear Shareholders,

Highlights of FY 2017 – 2018

I am very happy to share that we have once again achieved revenue growth of 8.6% and 4.3% in USD and INR terms respectively for FY 18. In spite of the headwinds from global economic uncertainties, our growth was higher than the average revenue growth for our industry. The fundamentals of Mindtree continues to remain strong and we are well positioned to seize opportunities that will help us to achieve industry-leading growth. I would like to share few financial highlights of FY 18 with you:

  • Our revenue has grown at a CAGR of 14.2% over the last five years against the industry average CAGR of 10.5%, a testimonial to our industryleading growth.
  • Our EBITDA for FY 18 was INR 7,405 against INR 7,181 million for FY 17 and has grown at 3.1% over the year and at a CAGR of 5.1% over the last five years.
  • Our net profits for FY 18 was INR 5,701 million and grew at 36.2% over FY 17.
  • Our earnings per share (EPS) was INR 34.28 in FY 18 against INR 24.89 in FY 17 and has grown at a CAGR of 10.9% over the last five years.
  • Our return on capital employed (ROCE) for FY 18 remained strong at 26.5% and grew from 22.4% in the FY 17.
  • Our cash flow conversion (EBITDA to operating cash flow conversion) for FY 18 was impressive at 76.2%. The Days Sales Outstanding (DSO) was strong at 67 days.

The revenue gained traction during the second-half of the FY 18. The digital revenue grew at 18.9% in FY 18 against FY 17. The traction in revenue was driven by revenues from our top customer and other clients like a leading consumer credit reporting agency and a Fortune 250 insurance-major.

Through ‘Run Your Business’, we integrate the traditional-run-the-business silos of infrastructure, applications and testing and modernize the IT operations. Through ‘Grow Your Business’, we leverage on the innumerable avenues provided by the digital world to pursue business-growth and drive transformations and innovations. Our solutions have yielded operational efficiencies, high-quality solutions and provision of competitive advantage to our clients. Mindtree is moving fast to seize the transformational opportunities and lead the industry in the path-breaking technologies such as Artificial Intelligence (AI), Blockchain, Cognitive Computing and Internet of Things (IoT) through Enterprise Reimagination.

Our recent acquisitions have enabled us to expand our service offerings across verticals. With seamless integration of the acquired businesses we are leveraging the benefits of combined Go-ToMarket strategy, specialized service offerings and operational efficiencies.

Technology is disrupting the established way of doing things. Our campus recruits undergo a dedicated 60-90-days residential training program at our Global Learning Centre, Mindtree Kalinga. With focus on “Great Quality, Delivered Faster”, our Mindtree Minds are constantly challenged to upskill themselves, learn new-age skills and prepare themselves for the future. We are constantly adding advanced courses on path-breaking digital technologies and new-age engineering methods on Yorbit, our home-grown cloud-based virtual learning platform. The average annual learning hours per employee was 73.27 during FY 18 as against 53.38 during FY 17.

As part of our CSR initiatives, the outlay towards I Got Garbage (IGG) was INR 72 million and donation to Mindtree Foundation was INR 46 million. IGG initiative has brought a technology-led revolution to the waste management problem by brining dignity to the disenfranchised workers in this value chain. Our IGG platform has expanded to include I Got Knowledge, I Got Skills, I Got Crops and University of Commons towards improvement in students’ learning, skilling, transformation of labour market, creation of value chain for farmers’ produce and enabling initiatives that link partners with social businesses. Through Mindtree Foundation, we develop Assistive Technologies (AT) to help people with disabilities in their activities of daily living and earning and making them easily available and affordable.

We have consistently stood by our commitment in striving to enhance shareholders’ value. We completed our first buyback program as part of our philosophy of enhancing shareholders’ value and achieving optimal capital structure. We paid a special dividend of INR 2 per share on completion of ten years of Initial Public Offering (IPO) in addition to annual dividend in line with our dividend policy.

We have made a head-start in voluntary adoption of Integrated Reporting (IR) in accordance with International Integrated Reporting Council (IIRC) integrated reporting framework and SEBI circular on IR to aid our key stakeholders to get a holistic view of company’s strategic focus, future orientation and value creation which revolves around the 6 capitals – Financial, Manufactured, Intellectual, Human, Social and Relationship and Natural.

Outlook and Priorities for FY 2018-19

Our continuing strategic investments in expertise for Domain, Digital and Run are clearly recognized by the market. We have once again exceeded industry estimates for the 5th year in a row and also consistently beating industry growth rates in 9 out of 11 years since our IPO. With a steady pipeline, optimistic demand environment and improvement in win ratios, we are poised for a stronger revenue growth in FY 19 compared to FY 18.

Our four strategic priorities elaborated in MD&A namely Digital Packages and Platforms, Focused Innovation for Run and Grow, Consulting First and Automation will enable us to establish market leadership and provide industry leading returns to our stakeholders.

Corporate Governance

We strongly believe in integrity and transparency as key governance pillars. Some of the recognitions we received during the year are summarized below:

  • We have received the SAFA best presented Annual Report Award for 2016 for the communication and information technology sector for transparency, accountability and governance in our Annual Report by South Asian Federation of Accountants.
  • We have received Special Commendation for Golden Peacock Award for Excellence in Corporate Governance – 2017 awarded by the Golden Peacock Award Secretariat, Institute of Directors, which is a token of its identification for adopting exemplary Corporate Governance practices.
  • We have been awarded the winner of the Silver Shield for the Annual Report including the financial statements for the year ended 31st March 2017 by the Institute of Chartered Accountants of India (ICAI). We have been winning awards from ICAI for the last 4 years consecutively which comprises Silver Shield on three occasions and Plaque on one occasion demonstrating the highest standards and best practices we consistently adopt in financial reporting.

We take pride in our standards of corporate governance and look upon it as a key driver of sustainable growth and long term value creation.

I would like to personally thank our outstanding Finance, Procurement, Secretarial, Travel and Immigration teams, which I am proud to lead. Their dedication and mantra of continuous improvement delivers consistently outstanding results for Mindtree and our stakeholders.

I am grateful to all our investors for your trust. Your support helps Mindtree become a stronger company everyday.

Jagannathan Chakravarthi Narasimhan

Chief Financial Officer

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