Mindtree beats street estimates with 15.1% net rise

Company announced an interim dividend of Rs 4 per share on a face value of Rs 10

Mid-sized information technology (IT) service provider Mindtree surpassed analysts’ expectation with a 15.1 per cent year-on-year rise in net profit during the July-September period at Rs 158 crore on a revenue of Rs 1,169 crore, on the back of  recent acquisitions. Revenue grew 31.6 per cent when compared with the corresponding quarter last year.

“It was a stellar quarter on all fronts. Our recent strong deal wins and strategic acquisitions will fuel growth and enhance our leadership in the digital space,” said Krishnakumar Natarajan, chief executive and managing director.

On sequential basis, the net profit was 14.5 per cent higher than April-June period.

The company board of directors also today announced an interim dividend of Rs 4 per share on a face value of Rs 10, after the result announcements.

According to Bloomberg consensus, analysts had predicted a profit of Rs 152.7 crore on the net sales of Rs.1122.5 crore.

In terms of dollar revenue, the company reported $180.3 million, a growth of 16.4 per cent while net profit was at $24.3 million, an increase of 11.2 per cent over the previous quarter.

The company said much of the growth during the quarter came from its high-yielding acquisition of digital services firm Bluefin in July this year, the revenue of which was added in Mindtree’s consolidated revenue.

Excluding Bluefin contribution, the dollar revenue grew by 8.1 per cent, the firm said.

In July this year, the Bengaluru-based IT company had bought Bluefin, a UK-based firm engaged in digital offerings and Relationship Solutions, a US-based analytics firm to boost its offering in the related segments.

“Our growth comes from strong presence in digital business. Digital in no more a discretionary spend as enterprises need digital technologies to survive. So we see strong demand in the segment in the year ahead and will beat Nasscom guidance of overall industry growth this year,” said Natarajan during an interaction with reporters today.

Industry lobby body National Association of Software and Services Companies (Nasscom) has forecast a growth between 12 to 14 per cent for all Indian IT companies for the current fiscal.

The company however, said the third quarter of FY16 could be slow due to seasonal factors such as lesser number of working days on account of festivals. The company also said that it was anticipating budget cut by one of its top 10 clients.

“The particular client is in the area which is not in focus of Mindtree. As per a mutual agreement between the client and Mindtree, we will exit out from the service contract soon,” said Natarajan adding that overall fiscal year growth would be much better.

The firm said it will continue to look for acquisition in spaces based on its requirements.