Mindtree shares fall 7% as it expects lower revenue in Q2FY17

Global IT consultancy firm, Mindtree shares plunged nearly 7% on Tuesday after the company lowered its financial expectations for the quarter ending on September 30.

At 1109 hours the shares of the company were trading at Rs 511 per piece, down 7.07% or Rs 38.90. 

On Friday, in a regulatory filing, the company said that now it expects Q2FY17 revenue to be lower than the previous quarter. 

"The decline is expected due to cross-currency movements, project cancellations and slower ramp-ups in a few large clients across different verticals and continued weakness in its UK-based subsidiary Bluefin", the company said.

Apart from revenue, the company expects margins to decline with a dip in EBITDA margins in this quarter as against Q1FY17. 

"Mindtree has implemented a range of operational efficiency improvements and cost control measures. The savings derived from these initiatives may not be sufficient to offset the revenue slowdown in Q2 FY17", the company added.

On the back of volatile macroeconomic environment in Europe, the Bluefin business will continue to face uncertainties for few more months, the company said. 

"Even with this change in outlook, the company continues to expect its annual revenue growth to be higher than the NASSCOM industry average."

On July 18, the company had announced its financial results for the quarter ended on June 30. It's consolidated net profit fell by 3.5% to Rs 123.5 crore in Q1FY17 as compared to Rs 128.3 crore in Q1FY16.