Mindtree Q2 PAT down 4.9%, $ revenues up 5.4% sequentially
Dollar revenue growth has consistently been improving in the last three quarters - it was 4.1 percent in June quarter and 2.9 percent in March quarter.
October 17, 2013 / 12:34 IST
Moneycontrol Bureau
Mindtree, a mid-sized software services exporter, beat street estimates on every parameter with dollar revenues growing 5.4 percent sequentially (15.6 percent year-on-year) to USD 124 million in July-September quarter. A CNBC-TV18 poll had estimated a 4.1 percent growth in dollar revenues at USD 122.5 million.Dollar revenue growth has consistently been improving in the last three quarters - it was 4.1 percent in June quarter and 2.9 percent in March quarter."The relentless execution of new strategies has delivered two consecutive quarters of strong revenue growth this year," says Krishnakumar Natarajan, CEO and MD of the company. Net profit in dollar terms declined 15.7 percent Q-o-Q (up 61.2 percent Y-o-Y) to USD 20.7 million in the quarter gone by.Also Read - TCS Q2 beats forecast, net up 24% to Rs 4702 crRupee revenues jumped 18.8 percent quarter-on-quarter (29.1 percent Y-o-Y) to Rs 769.6 crore while profit after tax fell 4.9 percent Q-o-Q (up 77.8 percent year-on-year) to Rs 128.7 crore during September quarter.Analysts on an average had expected the software exporter to report net profit of Rs 109 crore (down 19.5 percent Q-o-Q) on revenues of Rs 767 crore for the quarter.Growth in revenues was largely due to winning of big deals in Europe during October-March period of FY13. Mindtree signed deals worth around USD 142 million in September quarter as against USD 95 million in Q1.Profit was supported by a forex gain of Rs 20 crore in the quarter gone by as against Rs 61.8 crore in June quarter. The street had expected the company to report a forex loss.Natarajan said, "We continue to invest in expertise-led solutions and attracting top quality industry talent. This drives positive business outcomes for customers while achieving sustainable growth."Earnings before interest, tax, depreciation & amortisation (EBITDA) rose 34.17 percent sequentially to Rs 159.8 crore and EBITDA margin expanded 240 basis points Q-o-Q to 20.8 percent as against analysts' forecast of Rs 154 crore and 20.1 percent, respectively.Attrition rate was down to around 12 percent last twelve months, lowest in the past 15 quarters. The company added 1,122 employees during the quarter on gross basis.Mindtree recommended an interim dividend of Rs 5 per share for the six months ended September 30, 2013. Interim Dividend will be paid to the registered shareholders on or before November 03, 2013, it says.However, the company now expects margins in October-December quarter to decline on a constant currency basis led by wage hikes (for 20 percent of employees) and higher selling, general & administrative expenses (SG&A).Brokerages' viewsBrokerage houses are bullish on the stock after second quarter numbers. Citi in its report says Mindtree is the top midcap IT pack and maintained buy post another solid quarter with a target price of Rs 1600 a share.Credit Suisse raised earnings per share estimates for FY14-16E by 4-6 percent with a target price of Rs 1,700 while Barclays increased its FY14-15 earnings per share expectations by 3-4 percent.Barclays raised target price to Rs 1,460 from Rs 1,165 earlier and maintained overweight rating on the stock. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
