Mindtree Q3 net profit slips 26.7% to Rs 103 crore

Mid-sized IT firm Mindtree's net profit for the December quarter tumbled 26.7% to Rs 103.1 crore, impacted by currency movement, seasonality of business and lower profitability from its Bluefin and Magnet 360 business.

The Bengaluru-based firm had posted a net profit of Rs 140.7 crore in the year-ago period. Its revenues, however, grew 7.1% to Rs 1,295.3 crore in the quarter under review from Rs 1,209.5 crore in October-December, 2015 period.

"Small part of it (fall in net profit) is because of currency movement ... Second is during the course of the year, we had two businesses that we acquired -- Magnet 360 in the US and Bluefin in Europe. Mostly because of the nature of their businesses, they operated at a lower profotability...Also, there was slower revenue growth (on account of seasonality)," Mindtree CEO and MD Rostow Ravanan said on a concall.

He added that the company saw strong deal pipeline during the December quarter, which was giving it confidence of registering "best growth in the industry this year as well".

"Strong deal closures (of USD 314 million) in this quarter are testimony to our expertise-led transformation capabilities. We continue to be seen as a primary partner for both the 'run the business' and 'change the business' technology initiatives of our clients," Ravanan said.

These competencies and the company's distinctive culture keep it well positioned to succeed in the "current dynamic environment," he added.

In dollar terms, Mindtree's net profit fell 28.3% to $15.3 million in the reported quarter, while revenue was up 4.7% to $192.2 million from the year-ago period.
Mindtree had a total headcount of 16,099 people with trailing 12 month attrition at 16.1%. The headcount is, however, lower than the September quarter when the company had 16,219 employees.

Mindtree's board has recommended an interim dividend of 20% or Rs 2 per equity share having face value of Rs 10 each for the quarter ended December 31, 2016. Also, it has approved the extension of Krishnakumar Natarajan's tenure as Executive Chairman till June 30, 2020.

Retail, CPG and manufacturing accounted for Rs 311.6 crore in revenue during the reported quarter, Rs 312.2 crore from Banking, financial services and insurance, Rs 475.7 crore from technology, media and services segment and Rs 195.8 crore from travel and hospitality sector.

It had 348 active clients as of December 31, 2016. The company added its first client in the USD 100 million category, while it added one client in the over USD 10 million category.