MindTree - Q2FY14 Result Review - Angel Broking

For 2QFY2014, MindTree reported strong set of results, ahead of our as well as street expectations on all fronts. The dollar revenues came in at US$124mn, up 5.4% qoq, on the back of robust 5.8% qoq volume growth. Blended realization dipped by 1% qoq due to change in revenue mix. In INR terms, revenue came in at Rs. 770cr, up 19% qoq. MindTree's EBITDA and EBIT margin grew by 238bp qoq and 261bp qoq despite giving wage hikes during the quarter, which was noteworthy. Operating margins got largely aided by sharp INR depreciation. The PAT came in at Rs. 129cr impacted by lower other income (net of forex gain) of Rs. 25cr as against Rs. 74cr in 1QFY2014.

MindTree's management indicated that the deal pipeline of the company remains healthy because of pick up in client spending as well as a result of company's greater concentration on mining its focus clients. It has signed ~US$148mn TCV worth of deals during 2QFY2014. We continue to be positive on the stock owing to its diversified revenue portfolio and past performance. The target price is currently under review.

Source : Equity Bulls

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