Mindtree Q3 net up 13% QoQ, co says project pipeline healthy

We are in the last phase of the September quarter earnings season, and the results announced by the BSE 500 companies so far have shown signs of a sharp recovery, as compared to the June quarter, when the economic activity in the country was compromised due to lockdown in various regions. From the BSE 500 list, 216 companies have announced their September quarter results so far. We excluded banking and financial companies.  Along with the index stocks we also analyse each sector quarterly earnings. (Data Source: ACE Equity)

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Mindtree reported a 13.4 percent growth in third quarter net profit sequentially, helped by the revival of its revenue momentum and improvement in gross margin level.

The midcap IT services company reported revenue of Rs 13,777 million, a growth of 3.5 percent sequentially. Net profit was Rs 1,415 million.

The chief executive Rostow Ravanan said the company has a healthy pipeline of projects which is being refreshed continuously, and that the company is seeing positive market momentum.

The company had 344 active clients at the end of the quarter ended December 31, 2017, and 17,200 employees. The trailing 12-month attrition at the IT services firm stood at 12.6 percent.

“These strong results also reflect our ongoing leadership in digital, and our unique ability to be the core digital anchor-partner for next-generation digital transformations,” said Ravanan.

The company currently derives 40 percent of its revenue from digital services, said CEO Ravanan. As automation takes hold and traditional businesses upgrade to newer technology, Indian IT service providers are increasingly investing in digital skills and technology to serve their clients better.

Tata Consultancy Services, the largest IT services firm, said its third quarter digital revenue was 16.8 percent, while Infosys said Emerging technology services such as artificial intelligence, cloud and big data and analytics and software such as Edge, Nia, Skava and Panaya accounted for 11 percent of the company's revenue last quarter.

Revenue in Mindtree’s technology, media and services vertical rose 1.56 percent to Rs 5049 million during the third quarter, while revenue in the banking, financial services and insurance vertical rose 3.8 percent during the quarter.