Mindtree Q3 profit up 58.5%, beats market expectations
Net profit rises to Rs140.8 crore from Rs88.8 crore a year ago, revenue rises 15.3%
Bengaluru: Software services company Mindtree Ltd said on Monday that its third quarter net profit rose about 58.5%, beating market expectations, helped by higher revenue from its banking, financial services and insurance, and retail, consumer packaged goods and manufacturing clients.
Net profit in the December quarter rose to ₹ 140.8 crore from ₹ 88.8 crore in the year-ago quarter, the company said.
Revenue rose 15.3% to ₹ 911.7 crore from ₹ 790.6 crore a year earlier.
The company had 201 active clients as of 31 December and received a $50 million order in the quarter from an existing client. Mindtree signed orders for $132 million in the third quarter of which new orders were worth $46 million. The company got about 63% of its total revenue from the US, its largest market.
“Our ability to drive significant optimization in our chosen verticals, in IT and application management, remains a strong foundation for delivering sustained value to our clients," chief executive Krishnakumar Natarajan said in a statement.
The company had been expected to report a profit of ₹ 136.2 crore on revenue of ₹ 919.9 crore, according to analyst estimates compiled by Bloomberg.
Separately, Mindtree said it would buy Discoverture Solutions, a US-based insurance solutions provider, in an all-cash deal for about $15 million.
“Mindtree being a mid-sized company, has done very well in the mid-market sector. The addition of a client in the $50 million category is a good signal in the current times," Greyhound Research analyst Sanchit Vir Gogia said in a note.
The company said it expects a strong deal pipeline in areas such as digital and infrastructure management, especially in North America. Natarajan added that the average deal size has gone up by 15% in the last two quarters. Mindtree expects deals mostly in the $20-$40 million range.
“We expect quarter 4 to be better than quarter 3 mainly because of better volume growth due to lack of seasonality. We strongly believe we will comfortably exceed the upper end of Nasscom’s industry guidance of 13-15% of FY15," Natarajan said on a post-earnings conference call.
The Discoverture acquisition will not have a significant impact on the company’s fourth quarter results, the company said.
Meanwhile, Sasken Communication Technologies Ltd said on Monday that its third quarter net profit rose 45% but revenue took a hit. Net profit in the December quarter rose to ₹ 16.13 crore from ₹ 11.12 crore in the year-ago quarter, the company said. Revenue in the period fell 5% to ₹ 107.27 crore from ₹ 113.14 crore.
Revenue from all its businesses—software products, software services, automotive, utilities and industrial, and network engineering services—decreased in the quarter.
Mindtree shares rose 2.37% to ₹ 1,412.60 on the BSE and Sasken shares fell 0.54% to ₹ 255.80 at the close of trading on a day the benchmark Sensex gained 0.5% to 28,262.01 points.
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