MindTree net dips 15% to Rs 20.62 crore

CORPORATE SCORECARD

The rupee appreciation, increase in wages and higher visa costs dented the bottom line of IT and R&D services provider MindTree Consulting, which reported a 15 per cent decline in net profit to Rs 20.62 crore for the first quarter ended June 30 compared with the corresponding period in the last financial year.

During April, the company raised salaries of 53 per cent of its staff. However, there were no such revisions during the corresponding previous quarter. The company also had to pay a higher visa cost. It had applied for close to 1,000 H1B visas during the quarter under review. The two factors, along with appreciation of the rupee, significantly affected the earnings of the company.

The company managed a 21.17 per cent increase in its top line to touch Rs 161.50 crore. "We are pleased with our revenue growth in the first quarter. The adverse impact of the continued appreciation of the rupee is a matter of concern. MindTree's business fundamentals, however, continue to remain strong," said MindTree Consulting Chairman & Managing Director Ashok Soota.

On a year-on-year basis, while IT services grew 25 per cent to Rs 125.35 crore, R&D services grew 10 per cent to Rs 36.15 crore. The revenue growth was assisted by the addition of 28 customers, including two Fortune 500 companies during the quarter. Now, MindTree's active customer base has increased to 175.

"We continue to see strong traction with customers in both our businesses. We maintain our revenue guidance for the year ($178 -$180 million)," Soota added.

As a result of the rupee appreciation, MindTree has revised its net profit guidance for the present financial year in the range of $22.5 "� $22.6 million from the previously announced $25.1 "� $25.2 million.

Operating profit during the quarter was down 26.66 per cent to Rs 17.13 crore.

On a sequential basis, net profit was down nearly 16 per cent. However, the top line was marginally up 3.15 per cent.

The gross addition of people during the quarter was 485, taking its headcount to 4,432 as of June 30.