Mindtree reports 58.6% growth in Dec quarter's net profit

Company says will grow ahead of sectoral average in FY15

Mindtree, a mid-sized information technology-services company, has reported growth in revenue and net profit for the October-December quarter of 2014-15, in line with expectations.

The company, based in this city, says it is confident of growing more in FY15 than the forecast for the sector by Nasscom, the apex association of software and services companies. Nasscom's forecast for revenue growth was 13-15 per cent.

Mindtree's net profit for the quarter ended December was Rs 140.8 crore, growth of 58.6 per cent over the same period the previous year. Revenue went up 15.3 per cent to Rs 912 crore, year on year. However, on a sequential quarter basis, the net profit grew only 2.5 per cent and revenue by 2.6 per cent. In dollar terms, the revenues grew 0.4 per cent on a quarter on quarter measure, to $147.7 million, marginally below the estimated $148.5 mn.

The operating margin expanded by 70 basis points to 20.5 per cent but there was a 1.5 per cent decline in volume (growth in billed manhours in a quarter). The company said this was primarily because of the seasonality in Q3, which has a higher number of holidays and furloughs.

The management exuded strong faith on the deal pipeline and order inflow for Q4. In the quarter under review, Mindtree signed orders worth $152 mn from existing and new clients.

“We are very optimistic that we will be back to strong growth, backed by the fairly healthy deal pipeline we see,” said Krishnakumar Natarajan, managing director. “We are also seeing that the average deal sizes are also going up and a buoyancy in the infrastructure management services business.”

In the quarter, Mindtree managed to grow one of its existing accounts to the $50 mn (per annum) revenue category, a first for the company. It added 1,016 employees on a gross basis. Staff attrition, however, went up to 18.1 per cent over the past 12 months. The company said it had taken some measures to address this and expected the count to stabilise in the next quarter.

Mindtree to  buy US firm for $15 million

After about four years, mid-sized information technology services company Mindtree has returned to the inorganic growth path. The Bengaluru-based company said it had entered into a definite agreement to acquire US-based Discoverture Solutions LLC for about $15 million (Rs 94 crore).