The impact of the coronavirus pandemic on the travel and hospitality sector seems to have bottomed out, Mindtree CEO Debashish Chatterjee said after a quarter in which the revenue contribution from the travel vertical dropped by more than 50 percent, dragging the company’s overall topline.

Mindtree saw its dollar revenues drop 9 percent sequential in the first quarter of FY21. The company expects a better performance in the second quarter. Mindtree's revenues for the June quarter stood at $253.2 million, compared to $278.4 million.

The company's revenues from travel, tourism and hospitality—which until the last quarter amounted to 16 percent of the total—dropped by over 50 percent in the June quarter largely due to the effect of the COVID-19 pandemic.

“Travel, hospitality were badly impacted in the pandemic, and we had expected the impact,” Chatterjee told CNBC-TV18.

“We expect softness in travel and hospitality for some time. Unless something unforeseen happens, the COVID impact in travel, hospitality has reached

The company saw growth in other industry segments, such as communication, media, technology (CMT) and CPG. “We expect Q2 to be better than Q1,” Chatterjee had said in an earnings call on Tuesday.

Profits, margins improve

Mindtree reported a 111.7 percent year-on-year growth in profits. It came largely due to the one-time bonuses paid off last year.

The company also recorded strong EBITDA margins at 18.2 percent, largely driven by the rationalisation of subcontractor costs, the CEO said. “Efficiencies are kicking in, and EBITDA is improving. We want profitable growth, and we have put an operational discipline in place,” he said.

The Microsoft factor

During the quarter, the company’s top client Microsoft’s revenue share grew to 30.1 percent in Q1 from 24.8 percent.

“The top client has been at the forefront of digital transformation during the pandemic. We supported the client in many of their portfolios,” Chatterjee said. “I want my top account to grow, but it will balance with growth in other accounts. We want to focus on strategic clients, do longtail rationalisation,” he added.

Highlighting a new strategy, the CEO said that Mindtree will focus on four areas in digital—customer success, data and intelligence, cloud, and enterprise IT.

First Published:Jul 15, 2020 3:46 PM IST