Mindtree posts 35% rise in net profit to Rs 191.2 cr in December quarter; forecasts stronger Q4 growth

New Delhi: Mid-sized IT firm Mindtree on Wednesday said its consolidated net profit for the December 2018 quarter grew 35.1 percent to Rs 191.2 crore and exuded confidence that its January-March numbers will be better than the just-concluded quarter.

Mindtree had registered a net profit of Rs 141.5 crore in the October-December 2017.

Its revenue grew 29.7 percent to Rs 1,787.2 crore in the December 2018 quarter from Rs 1,377.7 crore in the year-ago period.

"Our consulting first approach combined with deep technology and domain expertise are helping our clients drive enterprise-wide transformations...this has also helped the company sustain its growth momentum, even in a seasonally weak quarter," Mindtree Chief Executive Officer and Managing Director Rostow Ravanan told reporters.

He added that the company continues to invest in people to further strengthen its ability to create sustainable value for all stakeholders.

The Bengaluru-based company has been in the spotlight over speculations of promoters being under pressure to sell their stakes. The management, however, skirted questions on the issue saying it remains committed to delivering growth for the company but there are some matter which are not under its control. "Shareholders make their own decisions on when they want to buy, how much they want to buy, when they want to sell, etc. It is outside our purview in that sense," he said.

Ravanan further stated that: "We can make sure that things go right at Mindtree, we take care of people, customers and continue to deliver industry leading growth, so the stake sale is not something that we have a view on or would like to make a comment".

Mindtree posts 35% rise in net profit to Rs 191.2 cr in December quarter; forecasts stronger Q4 growth

Rostow Ravanan, Chief Financial Officer of MindTree. Reuters

According to reports, one of Mindtree's largest investors and Cafe Coffee Day (CCD) founder, V G Siddhartha, and two of his firms are expected to sell their stakes.

The reports said the promoters are now under pressure to either sell a part of their holdings to the buyer, along with Siddhartha, or allowing the buyer to purchase shares from the market and force an open offer to gain control in Mindtree.

Mindtree's net profit—in dollar terms—was up 22.2 percent to $26.9 million, while revenue increased by 17.4 percent to $251.5 million in the December 2018 quarter as against the year-ago period. The board of directors has recommended an interim dividend of Rs 3 per equity share.

Ravanan said the company is confident of the fourth quarter being "slightly better" than the December quarter, and that Mindtree would be one of the best-performing companies in the industry for the full fiscal.

In the December 2018 quarter, Mindtree had 340 active clients. Its headcount stood at 19,908 people with trailing 12-month attrition at 13.4 percent.

Mindtree said its digital business in the quarter under review grew by 32.4 percent year-on-year.

Asked about the impact of the Brexit divorce deal being defeated, Ravanan said the company is monitoring the developments closely.

"We are in touch with many of our customers... there is a lot of uncertainty on this right now, so we don't have any sort of immediate assessment as of now... We are well prepared for UK customers, we have diversified growth across multiple countries, so we are okay in the immediate term," he added.

British Prime Minister Theresa May's Brexit divorce deal was defeated by a crushing margin in the parliament on Tuesday, further complicating the country's historic exit from the EU and triggering a no-confidence motion against her government. Britain is set to exit the 28-member European Union, which it joined in 1973, on 29 March. With just over two months to go until the scheduled departure, Britain is still undecide on what to do.

Mindtree said during the December quarter, the National Company Law Tribunal (NCLT) approved the scheme of amalgamation of Magnet 360.

Also, the company signed deals with a total contract value (TCV) of $256 million, including new deals and renewals.

 

 

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Updated Date: Jan 17, 2019 08:18:12 IST

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