You are here: Home » Companies » Results
Business Standard

Mindtree profit up 35% in Q3, becomes billion dollar firm on run rate basis

Promoters stake sale not on cards, says management

Debasis Mohapatra  |  Bengaluru 

Mindtree
Mindtree | Photo: Wikipedia

Mid-tier (IT) services firm on Wednesday crossed the $250-million revenue milestone in the December quarter, while the management dismissed rumours of any stake sale plans by the founders.

There have been rumours about an impending stake sale by Cafe Coffee Day owner and Mindtree's single largest investor V G Siddhartha, who holds close to 21 per cent stake in the company through various entities. He is learnt to be evaluating options to offload his stake to private equity (PE) investors.

Even the founders of the firm are said to have been approached by few PE firms to acquire their stakes, which stands at around 13 per cent as of now.

"There is no change in plan by the leadership team (as far as stake sale is concerned). The management team at is 100 per cent committed to the organisation," Rostow Ravanan, chief executive and managing director of said in a reply to a Business Standard query on the possible stake sale by the founders. "If any large investor sells his stake, it is not in our control."


People in the know pointed out that at present, PE firms such as KKR, Advent, Apax and Carlyle are evaluating the option to buy out Siddhartha's stake and have also sent feelers to the founders.

An acquisition of the founders' stakes assumes significance as the acquirer needs to hold at least 26 per cent to have board representation and to reach the trigger point for an open offer.

However, the founders are unwilling to part with their holding as the mid-tier firm is showing strong growth momentum and will most probability touch the $1-billion revenue mark in the ongoing fiscal.

In the third quarter, Mindtree posted net profit of Rs 191.2 crore, a 35 per cent rise over the corresponding period in the last fiscal.

Sequentially, net profit declined 7.3 per cent as the company took a hit of around Rs 20 crore for an acquisition.

The company posted revenue of Rs 1,787.2 crore, a growth of 29.7 per cent YoY and 1.8 per cent sequentially. In dollar terms, Mindtree's revenue touched $251.5 million, making it a billion-dollar firm on revenue run rate basis. While the dollar revenue rose 17.4 per cent YoY, it grew 2.1 per cent sequentially.

During the first nine months of the current fiscal, Mindtree has clocked $739 million in revenues.

"We have a strong pipeline of deals with healthy win rates. So, we hope to post an incrementally better Q4," said Ravanan.

In the quarter ended December, Mindtree saw a 50-basis-point expansion in operating margin sequentially to 15.9 per cent. Better pricing in contracts was one of the major reasons for this expansion, despite cross-currency headwinds during the quarter. The company witnessed 4.7 per cent sequential growth in the retail, CPG and manufacturing verticals. The hi-tech and media vertical grew 2.3 per cent QoQ. However, the banking, financial services and insurance (BFSI) segment declined 1 per cent owing to some client-specific issues.

During the quarter, Mindtree added 506 employees on a net basis, taking its employee count to 19,908 while the attrition rate went up marginally by 40 basis points at 13.4 per cent.

Mindtree shares ended 2.14 per cent lower at Rs 836.60 at the close of trading on Wednesday.

First Published: Wed, January 16 2019. 20:39 IST
RECOMMENDED FOR YOU