WHAT ARE THE KEY MARGIN LEVERS?
MindTree, should be able to work upon some of the above factors that act as a drag on margins. While a change is expected in the project-based nature of work and client mining in the long term, there are a few measures that could lead to margin expansion in the near term. Margin lever #1 – expanding the bottom of the pyramid: MindTree plans to expand the bottom of the pyramid, which would act as a margin lever. Going forward, the company plans to increase the number of recruitments at freshers level. Out of a planned addition of 1,600 employees in FY08, only about 600 (i.e. 37.5%) recruitments are expected to be laterals while the remaining hires would be from campuses. The proportion of MindTree employees with >3 years of experience is expected to increase to 55% in FY09 from 45% currently. Margin lever #2 – improving utilization In FY07, MindTree increased the number of USD 1m customers by 13 despite beefing up the client base by just seven on a net basis. This shows that it is focus
