MindTree - Solid beat... - ICICIdirect

MindTree's Q2 earnings were ahead of our and consensus estimates. Dollar revenues grew 5.4% QoQ to $124 million (ahead of our $122.7 million and 4.3% QoQ growth estimate) while constant currency revenues grew 5.7% QoQ. Fee revenues grew 4.8% QoQ led by volumes (+5.8%) offset by pricing (-1%). Rupee revenues grew 18.8% QoQ to Rs. 769.6 crore modestly ahead of our Rs. 761.9 crore estimate (average rupee realised at Rs. 62.08 vs. Rs. 62.08 estimate). EBITDA margins improved 238 bps QoQ ahead of our 181 bps increase estimate due to rupee tailwinds (+450 bps) offset primarily by wage hikes (-160 bps) and SG&A investments (-90 bps). Reported PAT was also ahead of our estimate led by margin beat.

Broad based growth across segments

Manufacturing, travel, BFSI (21.6%, 20.1%, 22.7% of revenues) grew 8.9%, 7.8%, 4.9% QoQ, respectively, while hi-tech (28.5%) was soft and grew 3.9% QoQ. IMS, consulting, app dev, maintenance and engineering led growth (20.5%, 13.3%, 3.8%, 6.3% and 3.7% QoQ, respectively) while package implementation declined 17.4% QoQ. Europe, the US saw demand uptick (11.5%, 5.7% QoQ, respectively) while APAC (4.2%) helped. Top 1, 10 client revenues grew 6.7%, 8.8% QoQ, respectively. Net additions were 702 while attrition, utilisation (ex-trainees) declined 50 bps, 370 bps QoQ, to 11.9% and 70.3%, respectively. We would revisit our estimates and come out with a detailed report shortly.

Source : Equity Bulls

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