Mindtree Q3 net profit up 7.2%; rejigs management

Company's revenue increased 33.2% to Rs 1,214.5 crore for the said quarter

Mid-sized IT firm Mindtree today posted a 7.2% rise in net profit at Rs 150.9 crore for the December quarter on strong growth across segments, and also announced a recast of its top management.

The Bengaluru-based company's net profit stood at Rs 140.8 crore in the year-ago period.

The company has reshuffled its management structure at the top level by elevating its CEO and Managing Director Krishnakumar Natarajan as the Executive Chairman, following the stepping down of co-founder Subroto Bagchi. Executive Director and Head Enterprise Service Lines Rostow Ravanan will replace Natarajan, while Bagchi will continue as an independent director.

Mindtree also announced the acquisition of Magnet 360 for $50 million in cash, a move aimed at addressing the fast-growing cloud-based services market.

Mindtree's revenue increased 33.2% to Rs 1,214.5 crore for the said quarter from Rs 911.7 crore in the year-ago period.

Talking about the quarter, Natarajan said: "We saw good revenue growth in Q3 as we continue to strike the right chord with our clients. This broad-based result reflects the ongoing momentum of our key focus areas such as Digital and Managed Services."

In dollar terms, the firm reported a 0.2% growth in net profit at $22.8 million and 24.8% rise in revenue to $184.4 million.

It had 294 active clients and 16,243 employees (addition of 1,306 employees at gross level) as of December 31, 2015. The trailing 12 months attrition stood at 16%.

Retail, CPG and Manufacturing accounted for Rs 247.3 crore, while BFSI and Technology, Media and Services contributed Rs 305 crore and Rs 367.1 crore to revenues during the quarter.

Travel & Hospitality segment accounted for Rs 105.3 crore.

Mindtree has recommended an issue of bonus shares in the ratio of 1:1 (one additional equity share for every existing equity share). This is the second bonus shares issue in the last two years.

It has recommended an interim dividend of Rs 4 per equity share of par value Rs 10 each) for the said quarter.

On the acquisition, Natarajan said the $50 million consideration includes an upfront payment of $37 million and earn out and additional payout of up to $13 million over the next two years.