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Mindtree Q3 profit up 14% on strong execution

BENGALURU: Mid-tier IT services firm Mindtree reported 13.8 per cent rise in net profit to $22 million and 3.9 per cent growth on revenues to $214.3 million for October-December quarter on strong execution.

The Bengaluru-headquartered company's net profit stood at $ 19.3 million on revenues of $ 206.2 million during the July-September quarter.

Mindtree said it foresees a high single-digit growth for the fourth quarter (January-March 2018) of this fiscal and the subsequent period on the back of steady multi-year and multi-million order book.

During this period, the company posted a net profit of Rs. 141 crore; while revenues stood at Rs.1377 crore in Rupee terms.

"This has been our best Q3 since 2011 which is typically seasonally a weak quarter for the industry," said Rostow Ravanan, CEO & Managing Director, Mindtree, adding that "a combination of strong revenue growth, focused approach in execution and cost efficiency, and absence of a one-off restructuring item in third quarter (Q2 saw $2 million hit due to workforce restructuring in Europe) led to growth in profitability".

Last week, Mindtree's larger peers Tata Consultancy Services and Infosys posted 1 per cent growth in dollar revenue on a sequential basis.

Analysts said the company has beaten estimates and posted a higher operating margin of 15.1 per cent on the back of strong revenue and cost efficiency.

Mindtree saw sluggish quarterly growth early this fiscal as some of its large clients witnessed slowdown. The company said "those accounts are now back into higher growth". "We definitely see a strong traction in the marketplace, pipeline is continuously getting refreshed," added Ravanan.

Mindtree's digital technology services accounted for more than 40 per cent of its revenues.

Ravanan said the company is at least one or two quarters away from stabilising Magnet360 and Bluefin – acquired entities that have dragged Mindtree's margin for the past few quarters.

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