Bangalore: Mid-tier information technology (IT) and product engineering services company MindTree Ltd posted a 2.3% sequential growth in revenue to $103.7 million for the quarter ended December.

IT services business revenue grew 6.7% while the product engineering services (PES) component declined by 5.4%, said chief executive and managing director Krishnakumar Natarajan. Volume growth showed a marginal decline, he said.

Classroom at Mindtree office in Bangalore. Photo by Hemant Mishra.

Net profit in dollar terms was $12.1 million, flat over the previous quarter, but an 80% increase over the same period last year.

The strong margin expansion was largely attributable to the rupee weakening, but chief financial officer Rostow Ravanan said that there was pricing growth coming in from the full billing realization of a few large transition projects that closed during the quarter.

The earnings were largely in line with expectations, and there were no positive or negative surprises, said Shashi Bhushan, senior research analyst at Prabhudas Lilladher Pvt. Ltd. “The company had indicated that volume growth will be muted, and accordingly there has been a marginal decline," he said.

Outlook for the PES business continues to be uncertain this quarter, Natarajan said.

“Budgets appear stable, but there is reduced visibility on that front," he said.

In the three months ended 30 September, MindTree crossed the $100 million quarterly revenue mark for the first time, growing 9.5% sequentially with margins improving to 12.8%, attributing this to the sharper business focus on a few select verticals.

sridhar.c@livemint.com

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