MindTree Q4 net up over two-fold at Rs 68.9 cr

Mid-sized IT firm MindTree today posted an over two-fold increase in net profit at Rs 68.9 crore for the quarter ended March 31, driven by strong growth in software services.

The company had posted a net profit of Rs 32 crore in the year-ago period.

The income from software services increased over 34 per cent to Rs 525.7 crore in the reported quarter from Rs 391.2 crore in Q4 FY2010-11.

On a full-year basis, the company's net profit stood at Rs 218.5 crore as against Rs 101.6 crore in 2010-11.

Income from software services grew over 26 per cent to Rs 1,915.2 crore in 2011-12 from Rs 1,509 crore in 2010-11.

"FY 2011-12 has been a great year. We got the leadership team to a 'back to basics' approach, which has helped to grow margins consistently each quarter.

"We focused on a few verticals and did deeper mining of existing relationships," MindTree CEO and Managing Director Krishnakumar Natarajan said in a conference call.

Going forward, MindTree believes it will continue to deliver higher revenue growth than industry estimates in FY 2012-13 and improve EBITDA margins further, he added.

The company has, however, cautioned against uncertain global environment and currency volatility.

"Though budgets are stable, there is delay in decision making...We foresee muted growth in Q1," he said adding that "People are conscious but are not panicking".

The company also sees increased visa costs as a challenge in the short-term.

MindTree added 502 people (gross) during Q4, taking its total people strength to 11,000 as of March 31, 2012.

"We have given campus offer letters to 3,000. The number of lateral hires will depend on the demand," Natarajan said.

The company has earmarked a capex plan of USD 25-30 million for FY2012-13.

"A large portion of this would go towards facility expansion, one in Whitefield, another in Mysore and on a new training and product development facility in Bhuwaneshwar.

Another portion would be towards people addition," MindTree Chief Financial Officer
Rostow Ravanan said.

The investments are focussed on bringing in higher profitability for the company, he added.

MindTree said the effective tax rate for the company could go up to 21-22 per cent this fiscal as two of its SEZ units would move to 50 per cent rebate (under SEZ rules) from 100 per cent rebate.

The Board of Directors have recommended a final dividend of 15 per cent (Rs 1.50 per equity share of par value Rs 10 each) for the year ended March 31, 2012.