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Mindtree's Q4 net up 14 pc at Rs 78.9 cr

Mumbai, Apr 22, 2013, (PTI):

Mid-sized IT firm MindTree today said its standalone net profit has risen 14 per cent to Rs 78.9 crore for the quarter ended March 31, 2013, driven by strong growth in IT services businesses.

The company’s net profit stood at Rs 69.2 crore in the same period last year.

However, on sequential basis, net profit dipped 20.1 per cent from Rs 98.8 crore on account of forex loss of about USD 2.8 million in the January-March 2013 quarter and investments made on increasing headcount across geographies.

MindTree’s standalone revenue grew to Rs 612.4 crore for the reported quarter from Rs 525.7 crore in the year-ago period, up 16.5 per cent.


For the year ended March 31, 2013, the company’s net profit grew 55 per cent to Rs 338.9 crore, while revenues were up 23.3 per cent to Rs 2,361.8 crore.

"In a challenging year, we have delivered revenue growth and better margins. We have also delivered consistently, setting up a platform for continued improvements,” MindTree MD and CEO Krishnakumar Natarajan said.

Revenues from product engineering services (PES) grew 5.3 per cent to Rs 182.3 crore, while that from IT services (ITS) was up 21.9 per cent to Rs 430.1 crore in the reported quarter year-on-year.

"In FY’13, our growth was impacted by PE services due to volatility in some segments such as semiconductor and consumer devices, resulting in some customer ramp down. In FY’14, we see revenue growth to be better than FY’13 overall,” he said.

Natarajan added that this confidence was based on the efforts made by the company to increase its sales teams for both ITS and PES.

"We have enhanced our sales teams and re-oriented approach to account management to increase focus on our top 40 accounts. This includes specific investments in our top 21 to 40 customers. We expect growth from Q4 to continue in Q1 and therefore we expect a positive start to the year,” he said.

Shares of MindTree were trading at Rs 858.90 apiece, down marginally from its previous close on the BSE.

MindTree saw volume increasing by 3.7 per cent but price realisation declined marginally by 1.4 per cent in the fourth quarter mainly because of seasonal impact.

Q3 saw better pricing because of lower billing days. On a contracted basis, pricing continues to be stable, the company said adding that it has USD 127 million worth of hedges for FY14 at an average rate of Rs 57.38.

The company had 232 active customers as of March 31, 2013, while USD 20 million customers increased to 5.

MindTree added 974 employee in the quarter to take its total headcount to 11,591 employees as of March 31, 2013. Utilisation including trainees is 69.6 per cent broadly similar to 71.4 pc in the previous quarter.

"In FY’14, we will hire about 1,700 freshers. Numbers of lateral hires will depend on the demand," he said. A decision on wage hikes for the fiscal will be taken by June.

MindTree saw attrition rate (on last twelve months basis) drop to 13.4 per cent in the reported quarter from 15.1 per cent in the October- December 2012 quarter.

The company will invest USD 20 million during the ongoing fiscal for business activities and growth plans, while another USD 15-20 million is expected to be invested in setting up a new campus in Bhubaneswar.

"The first phase is expected to be completed by June 2014 and it will have academic and residential units. The first phase can house about 500 people," he said.

In FY’13, the company’s capital expenditure stood at about USD 22.5 million.

The Board of Directors has recommended an interim dividend of 40 per cent (Rs 4 per equity share of par value of Rs 10 each) and a final dividend of 50 per cent (Rs 5 per equity share) for the fiscal ended March 2013, subject to approval by shareholders at the forthcoming AGM.

Along with the interim dividend of 30 per cent declared in October last year, the total dividend for the year comes to 120 per cent (Rs 12 per equity share).

The company said it intends to maintain similar or better levels of dividend payout over the next few years in view of the improved predictability and stability of the company’s operations.

"However, the actual dividend payout in each year will be subject to the investment requirements of the annual operating plan for the year and any other strategic priorities identified by the company,” the statement said.

Besides, the Board has also approved Kalyan Kumar Banerjee's request for de-classification as a promoter with immediate effect.

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