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Mindtree slips nearly 9% post Q1; Should you buy?
Mindtree took a knock of more than 7 per cent on Thursday morning on dull earnings.
The company has 18,990 technical professionals with 12 per cent attrition rate.
Mindtree took a knock of nearly 9 per cent on Thursday morning on dull earnings.
The IT firm posted 13.17 per cent drop in net profit sequentially at Rs 158.20 crore for the quarter to June. The figure stood at Rs 182.20 crore in the March quarter.
Bottom line surged 30 per cent on a year-on-year basis. The company had reported a net profit of Rs 121.70 crore in the same quarter last year.
Revenue from operations increased 12 per cent on a QoQ basis and 27 per cent YoY in Q1 FY19.
In dollar terms, net income grew 24 per cent annually, but declined 17 per cent QoQ to $23.3 million. Revenue grew 21 per cent annually but declined 6.8 per cent quarterly to $242 million.
"Automation is playing a significant role in modernising our technology service delivery, enhancing both efficiency and speed-to-results for our clients," said the company in the statement.
The company has 406 'bots' or software application, running automated tasks over the internet and performing tasks that are simple and repetitive at a much higher rate than humans. These are deployed to work autonomously and enable its employees to do more and accomplish larger goals.
The stock closed the day 8.67 per cent down at Rs 970.45 on BSE.
CITI retailed ‘Sell’ with a target price of Rs 1,025. “Mindtree has shown strong revenue growth, but EBIT remained below expectations,” it added.
Brokerage Axis Capital has a ‘Buy’ call on the IT firm with a target price of Rs 1,170. It believes that strong Q1 performance has set the tone for industry-leading growth in FY19.
“Improved profitability at Bluefin and Magnet360 will further aid the margin,” Axis Capital said.