IT firm MindTree chasing 2-3 large deals

MUMBAI: IT services provider MindTree is chasing 2-3 large deals of over $ 25 million, according to note by brokerage Prabhudas Lilladher. The firm was also shortlisted in some large deals although it failed to make the final cut. "We see this as positive. However, we may need to wait for 1-2 quarters more before we see positive traction from their investment in large deal's team," the note by senior research analyst Shashi Bhusan said.

The brokerage has a 'buy' rating on the stock. While MindTree's IT services unit is expected to continue to drive growth, the product engineering services unit is likely to return to growth as ramp-downs have bottomed out, the note said. The company's revenue growth guidance is in the range of 11-14%, on par with what the apex software industry organisation Nasscom has projected.

However, the brokerage said the company may moderate fresher joining as utilisation was around 69%. It has made approximately 3,000 offers to freshers for FY13 and expects around 250 freshers to join in the September 2012 quarter.

Profit margins for the September 2012 are expected to flat as salary increments will likely offset any currency depreciation gains.