First Cut of Mindtree Q1FY23 Results - Reliance Securities

By Mitul Shah - Head of Research at Reliance Securities.

Mindtree (MTCL IN) 1QFY23 Result First Cut

Mindtree reported a strong performance in 1QFY23 with EBIT margin coming in at 19.2%, 75bps above our estimate of 18.4%.

Revenue grew by 4% QoQ/29% YoY in USD to US$399mn, 0.7% above our estimate of US$397mn (consensus US$399mn). Sequential constant currency growth came in at 5.5% vs. our estimate of 3.7%. (consensus 4.9%)

EBIT grew by 9% QoQ (up 47% YoY) to Rs5.9bn while EBIT margin stood at 19.2% (up 23bps QoQ /up 144bps YoY), 75bps above our estimate of 18.4% and 85bps above consensus estimate of 18.3%.

Its net income stood at Rs4.7bn (flat QoQ/ up 37% YoY), while adjusted net margin came in at 15.1% vs. our estimate of 15.2%. Net income was impacted by lower non operating income, which fell by 45% YoY and 56% QoQ to Rs395mn.

Our View: The company reported strong performance in 1QFY23 beating our estimates across all parameters. We expect the company to report healthy revenue due to strong deal pipeline and strong order book. The revenue contribution from top clients increased by 110bps QoQ to 26% which is high compared to the mid-cap peer group. At present, we have SELL rating on the stock.

We would revisit our estimates, TP and rating in our detailed note post management con-call scheduled today i.e. 13th July'22 @ 7:30pm.

Shares of MindTree Limited was last trading in BSE at Rs. 2899.35 as compared to the previous close of Rs. 2855.45. The total number of shares traded during the day was 53379 in over 6030 trades.

The stock hit an intraday high of Rs. 2915.00 and intraday low of 2853.10. The net turnover during the day was Rs. 154117992.00.

Source : Equity Bulls

Keywords

MindTree INE018I01017 Q1FY23Result FirstCut RelianceSecurities