Mindtree gains post Q1 results, acquisition of two companies

The stock was up 4% at Rs 1,277 on the BSE.

Shares of Mindtree were trading higher by 4% to Rs 1,277 on the BSE after the company reported a slightly better-than-expected 7.4% quarter-on-quarter growth in consolidated net profit of Rs 138 crore for the first quarter ended June 30, 2015 (Q1). Revenues grew 6.9% at Rs 982 crore on a sequential basis.

Analysts on an average had expected a profit of Rs 136 crore on revenues of Rs 979 crore.

Meanwhile, mid-sized information technology services company Mindtree has announced the acquisition of British technology consultancy Bluefin Solutions and US-based analytics firm Relational Solutions.

The stock hit a high of Rs 1,286 and has seen a combined 480,229 shares changing hands on the counter on the BSE and NSE till 10:28 AM.

Religare Institutional Research has retained a ‘hold’ rating on the stock, with a target price of Rs 1,300.

“Mindtree continues to outperform on growth and is making heavy investments in sales and enhancing its capabilities (via acquisitions). We expect the company to beat industry growth on an organic basis even as S&M costs and acquisitions pull down near-term margins,” a Religare analyst said in a results preview.

The broking firm IIFL has upgraded rating on Mindtree to ‘accumulate’ with a target price of Rs 1,325.

We believe that Mindtree should continue to attract ‘the growth and quality premium’ especially in the current scenario where many companies have witnessed unanticipated phases of revenue growth challenges, an IIFL analyst said in a report dated July 17.