Dear Shareholders,

FY22 has reinforced our confidence in our business model and strategic direction. We thrived through times of rapid change and uncertainty, reporting our highest ever deal wins of USD 1,612 Million. Our revenue in dollar terms grew at a CAGR of 13.4% over the last 10 years, well above the industry average of 10%. This is a testimony to our superior innovation and execution capabilities that are enabling us as well as our customers, to futureproof businesses and be at the forefront of digital transformation.

Financial highlights

The pandemic has pushed speed, scale and agility to the top of digital transformation agendas, creating a significant, broad-based demand for our offerings. This is manifest in our industry-leading profitable growth in FY22.

For FY22, our USD revenue stood at USD 1,411 Million, up 31.3% in constant currency and 31.1% in USD terms, and INR revenue stood at INR 105,253 Million, up 32.1% - a reflection of robust growth resulting from disciplined execution of our strategy. Despite headwinds due to supply-side challenges, we grew all dimensions of our business and delivered a strong and consistent EBITDA margin of 20.9% for FY22 compared to 20.8% for FY21. The net profit grew at 48.8% from INR 11,105 Million for FY21 to INR 16,529 Million for FY22.

We have maintained healthy liquidity to meet operational and strategic objectives. Our Days Sales Outstanding (DSO) on trade receivables has remained consistent at 60 days as at March 31, 2022 and as at March 31, 2021, amidst increase in business owing to better cashflow management of receivables. Our cash and investment balances stood at INR 36,020 Million as at March 31, 2022 against INR 28,065 Million as at March 31, 2021.

We have consistently stood by our commitment to enhance shareholders’ value. The Return on Equity (ROE) improved from 29.7% for FY21 to 33.8% for FY22. The Return on Capital Employed (ROCE) improved from 36.1% for FY21 to 41.5% for FY22. Our Diluted Earnings Per Share (DEPS) increased from INR 67.41 for FY21 to INR 100.25 for FY22. Dividend per share distributed to equity shareholders increased from INR 17.5 for FY21 to INR 27.5 for FY22.

During March 2022, our credit rating has been affirmed at ‘IND AAA’ by India Ratings & Research, which reflects our business and financial stability.

Talent supply

The broad range of career and development opportunities resulting from our growing client, technology and geographical footprint, makes us an attractive employer. With rapid digitalization around the world, the demand for skilled talent has also gone up manifold. This has resulted in attrition levels being higher than usual across the industry, as a consequence of which, cost of talent has risen significantly. In a highly competitive talent market, we are continually sharpening our employee value proposition with an innovative, ‘one-size-fits-one’ approach to employee engagement, development and performance management, further strengthening our position as an employer of choice.

Our rejuvenated campus hiring and training programs are helping us to not only hire more fresh graduates, but also accelerate their deployment to client projects. Mindtree Edge, our learn-and-earn and returnship programs, launched during the year, are helping us build additional diverse supplies of future-ready talent to meet our growth needs. The power of our brand is also reflected in the sustained success of our employee referral programs. The focus on campus recruitments and the aforesaid initiatives has led to re-balancing our talent pyramid and has considerably assisted us in offsetting the impact of attrition and higher cost of talent

Future of work

We have embarked upon a ‘Future Ways of Working’ program to create a flexible, more sustainable workplace, attuned to the realities of the new normal. At the core of this program is our F-O-R (Flexi, Office or Remote) working model, intended to create a win-win proposition for our clients as well as employees, while enhancing our ability to tap into larger pools of talent. We have set up offices in tier-2 and tier-3 cities in India, already having a headstart in Coimbatore and Warangal during FY22. We also expanded our presence in Pune with a new facility and set up our first development center in Kolkata.

Automation and digitalization

Deploying cutting-edge technologies, we provide a superior experience to our employees, while optimizing efficiencies, decision-making and compliance. We employed 50+ BOTs within the finance function to make various critical processes faster, more accurate and scalable. We also launched Flexor, an internal platform enabling delivery teams to improve profitability, allowing leaders to better monitor the performance of their respective portfolios, and making timely use of various levers to push for improvements.

We have also deployed a Crisis Communication System to provide real-time crises support to our employees globally, communicating with them via text and instant messaging, emails and voice calls. We have automated our Business Continuity Management (BCM) processes and invested heavily in state-of-the-art cyber-security and risk assessment capabilities and solutions to ensure secure and scalable adaptability to changes in working models and environments.

Integrated reporting

We have embedded integrated reporting in our thought process and strategic framework. We continue to holistically measure and report the organization’s success against its vision and mission.

In FY22, we formulated an Environmental, Social and Governance (ESG) vision with clear goals and timelines to not only determine our purpose and direction, but also measure our progress in achieving our ESG commitments through 2030. This vision represents our relentless focus on the triple bottom line of people, planet and profit, in making a positive impact on businesses as well as societies.

In addition to the above, our voluntary adoption of Business Responsibility and Sustainability Reporting (BRSR) for FY22 incorporating ESG-performance, is reflective of our transparency and good governance practices.

Good governance

Integrity and transparency are our key governance pillars. Our industry-leading and benchmark standards of Governance and Financial Reporting ensure consistent and long-term value creation. We have received the following key accolades during FY22:

Silver Shield Award for Integrated Reporting in Service Sector of ‘ICAI Sustainability Reporting Awards 2020-21’ towards ‘Excellence in Integrated Reporting’ for FY21 from The Institute of Chartered Accountants of India (ICAI)

Plaque Award for ‘Special Recognition – Reporting on Gender Equality’ in ‘ICAI Sustainability Reporting Awards 2020-21’ from ICAI

L&T Group CFO Award towards ‘Excellence in Financial & Management Reporting’ under Services and Concessions Sector in the 20^th CFO Award Event for FY21, for the second year in a row

‘Best Business Continuity Management’ Award and ‘Best Risk Team’ special recognition award at the L&T Risk Management Awards 2021

Outlook and priorities

In driving the next phase of growth, our targeted global investments across partnerships, large-deal solutioning capabilities, white-space opportunities, forward-looking working, delivery and go-to-talent strategies, mindshare initiatives, and mergers and acquisitions, among other areas, continue to position us well for profitable growth and long-term value-creation.

We are constantly engaging with our customers to propose innovative engagement and pricing models and financial engineering options, such as soft investments, supply chain financing, proof of concept and prototyping, aligned to the needs of our customers through our strategic pillars - Simplify, Differentiate and Change — coupled with our focus on specific industries, service lines and geographies. In FY22, we incubated Healthcare as a separate industry group to focus on customer experience, cloud and data analytics for payer, provider, medical device and health-tech segments.

For us as well as our customers, the future is bright and limitless, and the journey to get there ahead of others is an incredibly rewarding adventure. This is what inspires confidence in our ability to sustain our strong momentum. These achievements were made possible due to the relentless efforts and dedication of Mindtree Minds. We thank you for being a part of our growth story and look forward to your continued support as we lead the charge into the future and beyond.

Regards,

Vinit Teredesai
Chief Financial Officer