MindTree profit more than doubles, revenue up 10.5%

BANGALORE: Bangalore-based mid-sized IT firm MindTree more than doubled its profits for the quarter ended September 30, indicating its return to healthy growth after one of its founders quit more than six months back. For the first time in its history, the company clocked revenues of $ 100 million in a single quarter.

Mindtree beat analyst expectations and reported a 58 % sequential increase in profits at Rs 54.5 cr. Revenues grew 10.5 % to 456.7 cr in rupee terms. In the previous quarter, Mindtree's revenues had grown by 5.6% sequentially to Rs 413.1 crore.

While the management remained upbeat about growing better than industry average during the year, it cautioned that growth in a seasonally weak October-December (Third quarter) quarter will be muted due to a slow down in parts of its product engineering services business.

"The third quarter is seasonally weak due to lower number of working days and clients nearing the end of their budget cycle. Also, we are seeing a slowdown in the consumer and semi conductor sector in our product engineering services business," said MindTree CEO and Managing Director, Krishnakumar Natarajan. PES business brings in nearly 35 % revenues of the company of which the company's exposure to semiconductor and consumer sector is 20 %.

"Our ability to re-invent ourselves will take us to our next target of $1 billion in revenues. We will grow ahead of the industry as we continue to demonstrate optimism," said Natarajan. However, he did not set a time frame to reaching $ 1 billion in revenues.

Commenting on the demand environment, Anjan Lahiri President of MindTree's IT Services business said, "We have not seen any knee jerk reaction from clients. They continue to spend. However, we need to be cautious."

The company, which added 15 new clients and 1,003 employees in the quarter, is giving out an interim dividend of 25% ( Rs 2.50 per equity share of par value 10 each).