Mindtree share price rose in early trade on July 15 after the company posted its June quarter numbers.
The company on July 14 reported a 3.3 percent sequential increase in June quarter net profit, driven by other income (up 122 percent QoQ) and operating income but weak revenue limited growth.
Profit increased to Rs 213 crore in the quarter ended June 2020 compared to Rs 206.1 crore in the March quarter.
Revenue from operations fell 6.9 percent quarter-on-quarter to Rs 1,908.8 crore, while dollar revenue declined 9 percent to $253.2 million, the company told BSE.
At the operating level, its earnings before interest and tax (EBIT) grew by 2.6 percent sequentially to Rs 262.3 crore and margin expanded 120 bps to 13.7 percent QoQ in the June quarter, both ahead of CNBC-TV18 poll estimates of Rs 253 crore and 13.04 percent.
Macquarie | Rating: Underperform | Target: Rs 850
There was a decline of 9% QoQ in Q1 revenue despite 10.4% QoQ growth in top account. The EBIT margin boost is led by cost savings on SG&A.
The current margin is sustainable in the near-term as travel expenses remain low.
Macquarie raised FY22 EPS estimate by 26% on a higher margin assumptions, reported CNBC-TV18.
Citi | Rating: Sell | Target: Rs 840
Company's revenue was below estimates, while margin was better than the estimate. Its ex-top client, revenue declines 15.5%, QoQ.
Citi has lowered FY21-22 revenue estimates by 2-3% but raised EPS by 3-4%.
According to Citi, the valuations are not cheap given demand uncertainty.
At 09:26 hrs, Mindtree was quoting at Rs 973.75, down Rs 4.20, or 0.43 percent on the BSE.
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