Mindtree Q2FY22 Preview: Strong revenue but pressure on margins, expect majority of analysts
First to come out with quarterly results in the mid-cap IT section, Mindtree is slated to release strong earnings in terms of revenue, EBIT and PAT (profit after tax) in June-September quarter of the financial year 2021-22, as the majority of the analysts predict in their preview report.
First to come out with quarterly results in the mid-cap IT section, Mindtree is slated to release strong earnings in terms of revenue, EBIT and PAT (profit after tax) in June-September quarter of the financial year 2021-22, as the majority of the analysts predict in their preview report.
The brokerages expect Mindtree to report revenue growth between 25-27 per cent on year-on-year basis, while margins may see pressure during the second quarter. Anand Rathi, a brokerage firm pointed out. Mindtree to lead revenue growth, as they expect quarter-on-quarter growth for the company to be the highest in Q2FY22, followed by Persistent and Intellect.
Meanwhile, another brokerage firm YES Securities mentioned that the growth in the Mindtree to be led by Hitech and Travel verticals, while higher talent cost and lower utilization may lead to 17 basis posints (bps) QoQ decline on the margins front.
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Similarly, Nirma Bhang estimates 5.8 per cent constant currency QoQ growth with margins falling due to wage hikes starting July 1, 2021. The extremely strong stock price performance in Q2FY22 (up 62 per cent) likely prices in a much stronger growth than what the brokerage have pegged in.
“One of the disappointing aspects of the results thus far has been the order inflow (12 per cent growth for FY21). For a company of its size and given high expectations on growth built in, MTCL needs to show an above-trend pickup in order inflow,” Nirmal Bhang said in its Q2 preview report.
The brokerage would track progress of the Travel, Tourism and Hospitality (TTH) vertical, a key area of strength for MTCL during normal times, which had contracted quite dramatically post Covid on Q1FY21 and made steady improvement in subsequent quarters on the repeal of discounts.
It expects to see big spends by customers in this vertical on IT on the back of economic activity being opening up across the globe along with India and believe revenue from this vertical to likely touch pre-pandemic levels either in Q2FY22 or in Q3FY22.
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