Mindtree has reported good third quarter profits and is confident that it will beat the upper band of Nasscom’s 13-15 per cent guidance for this financial year.
The Bengaluru-based mid-size company posted a net profit of ₹140.8 crore in the December-ended quarter, a 58 per cent growth on a year-on-year basis. On a sequential basis, the growth was 2.4 per cent.
The company also announced the acquisition of US-based Discoverture Solutions for $15 million, which gives the company a stronger foothold in the insurance vertical. However, revenues from this acquisition will not reflect this financial year. Mindtree shares closed 2.3 per cent to ₹1,412.
Discoverture reports quarterly revenue run rate of $3.5 million, works with 15 property and casualty companies and has around 300 employees. For Mindtree, insurance vertical contributed 55 per cent of its BFSI revenues. BFSI contributed 27 per cent of the company's revenues at the end of the December-ended quarter.
Revenues in the third quarter stood at ₹911.7 crore, a growth of 15.3 per cent compared with the same period last year. On a sequential basis, revenue growth was 2.6 per cent. Further, the company grew a client which brought in $50 million, a first for the mid-size company.
“Amongst mid-size companies, Mindtree numbers are good and the $50 million client is positive and it needs to keep doing this more often,” said Sanchit Vir Gogia, Chief Analyst Greyhound Research.
Forex gain The quarter also saw the company gain in forex to the tune of $1.1 million and also saw its operating margins improve by 0.7 percentage points to 20.5 per cent.
CFO Rostov Ravanan said that outlook on margins will be stable. The company also gave out hikes to 15 per cent of its employees.
However, the company reported negative volume growth in the quarter, which Natarajan said was due to the seasonality factor. “The quarter has lower working days, people go on leaves, which all added to lesser volume growth,” he said. The company also announced an interim dividend of ₹4 per equity share.