Mindtree expects to beat Nasscom growth guidance in FY16

Company reports 31% growth in Q4 net profit; expects to start Q1 in a strong note

Midsize information technology services company Mindtree on Thursday showed a bullish growth outlook, closing 2014-15 on a positive note.

In the quarter ended March 31, 2014, Bengaluru-based Mindtree posted 31 per cent growth in its net profit at Rs 128.7 crore while the revenues grew 11.5 per cent compared with the corresponding quarter in the previous financial year.

However, on a sequential quarter basis, the net profit showed a decline of 8.6 per cent, mainly because of the impact of cross currency movements, while the revenue was largely flat with a growth of 0.7 per cent.

In the quarter under review, Mindtree saw a forex loss of Rs 13 crore as against a foreign exchange gain of Rs 7 crore in the previous quarter.

On a full year basis, the revenue at Rs 3,562 crore grew by 17.5 per cent while the net profit increased 19 per cent to Rs 536 crore. In US dollar terms, the revenue grew by 16.4 per cent while the net profit rose by 17.9 per cent.

Krishnakumar Natarajan, chief executive officer and managing director, Mindtree, said based on the order pipeline and the deal momentum, the company will be able to grow faster than the industry average in FY16.

“We expect to beat the Nasscom guidance as the first quarter of FY16 has got off to a good start with revenue momentum coming back,” he said.

For FY16, Nasscom has given an software exports growth guidance of 12-14 per cent.

During the Q4 of FY15, Mindtree reported a 100 basis points decline in operating profit which stood at 19.5 per cent, largely due to pricing pressure and forex movements.

The company said it does not expect any significant upward movement in margins due to pricing pressure and capital expenditure during the year.

In term of employee metrics, Mindtree’s attrition rate stood almost at the same level as it was in the previous quarter at 18.2 per cent. Regarding the recent exits of some of the company’s senior executives, Natarajan said certain exits are bound to happen as the company is preparing itself for its 2020 vision.

“We restructured our organisation to prepare it for the next three-five year. When you do such a transition, there will be some fall-outs. However, I want to categorically say that this is a zero cause of worry for us as we are very fortunate because of the company’s depth of leadership,” the CEO said.

The company added 1,517 employees during the quarter on a gross basis which took the headcount to 14,202.