Mindtree soars 11% on strong Q3 results

The stock hit a 52-week high of Rs 694, up 11% on NSE after the compared reported a better than expected 13.4% q-o-q growth in net profit at Rs 1.41 billion for December quarter.

Mindtree hit a 52-week high of Rs 694, up 11% on the National Stock Exchange (NSE) in intra-day trade, after the compared reported a better than expected 13.4% quarter on quarter (q-o-q) growth in net profit at Rs 1.41 billion for December quarter (Q3FY18). The information technology services company had profit of Rs 1.03 billion in previous quarter.

Operational revenue grew 3.4% q-o-q at Rs 13.78 billion against Rs 13.32 billion in September quarter. In dollar terms, Mindtree’s revenue grew 3.9% q-o-q at $ 214.3 million.

Analysts on an average had expected profit of Rs 1.09 billion and revenue of Rs 13.71 billion for the quarter.

Earnings before interest, tax, depreciation and amortization (EBITDA) margin improved by 350 basis point at 15.1% against an analyst estimate of around 13%.

Analyst at Prabhudas Lilladher expected Mindtree to report 2.7% q-o-q USD revenue growth for Q3FY18.  The brokerage firm estimated EBITDA margin at 13%, up 150bps q-o-q with headwinds from wage hikes for senior employees negated by operational efficiencies.

“We build in US$ revenue growth of 2.3% q-o-q on back of ramp up of deals won in recent quarters. We expect operating margins to improve by around 70bps aided by absence of one-time expenses and optimisation initiatives to recouped profitability of Bluefin and Magnet. We estimate net profits to decline by 14% q-o-q due to lower other income,” Emkay Global Financial Services had said in Q3FY18 results preview.

At 12:26 PM; the stock was trading 9.4% higher at Rs 682 on the NSE, as compared to nearly 1% rise in Nifty50 index. The trading volumes on the counter jumped multiple-fold with a combined 4.48 million shares changed hands on NSE and BSE.