Mindtree Q1 net dips 3.7%; sees growth returning in Q3

IT firm Mindtree posted a 3.7 per cent drop in consolidated net profit at Rs 123.5 crore in the June quarter that witnessed "strong winds" in the form of slower project ramp-ups and loss from its Bluefin business.
Citing challenges in the global environment arising out of the UK's exit from the European Union, Mindtree expects strong revenue growth from the third quarter beating industry average.
The Bengaluru-based firm's net profit stood at Rs 128.3 crore in the April-June 2015 quarter. Its revenues grew 35.8 per cent to Rs 1,327.6 crore in the quarter under review from Rs 977.5 crore in the year-ago period.

"Overall Q1 was a soft quarter compared to our previous quarters. There were delay in project ramp ups. There was strong competition in both traditional and digital businesses which led to a price compression...," Mindtree CEO and MD Rostow Ravanan told reporters on conference call.
He added that while the global environment poses short- term challenges, Mindtree remains confident that its investments are on the right track to accelerate growth for its clients and the company.
"In the last few years, we have grown faster than the industry and this year too, Mindtree should be ahead of the growth numbers," he said.

IT body Nasscom expects India's software export revenue to grow 10-12 per cent in FY2016-17.

In dollar terms, Mindtree's net profit fell 8.7 per cent to USD 18.5 million in the April-June 2016 quarter, while revenue was up 29 per cent to USD 199 million from the year-ago period. About 40 per cent of its revenues came from digital services.
Mindtree had a total headcount of 16,110 people with trailing 12 month attrition at 16.5 per cent.
Mindtree will see an impact of two per cent on its margins on account of wage hikes. Effective July, the salaries of its offshore employees will be hiked by 8-10 per cent, while for those onsite, it will go up by 2-4 per cent, he said.

Asked about the impact of Brexit, Ravanan said there is a global uncertainty.
"There is a global uncertainty, triggered by Brexit. Clients in Europe and the US are being conservative. There are some deferments, some cancellations, slower ramp-ups," he added.
Europe, which accounts for 23 per cent of the company's revenues, declined 3.9 per cent, primarily on account of losses in its Bluefin business.