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Mindtree: A Subdued Performance - Views on News from Equitymaster
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Mindtree: A Subdued Performance
Mar 29, 2016

Mindtree has announced results for the third quarter of FY16. The company has reported a 3.9% QoQ growth in sales and a 4.6% QoQ fall in net profits. Here is our analysis of the results.

Performance summary

  • Consolidated net sales grew by 3.9% QoQ during 3QFY16. The topline was subdued due to the seasonal weakness on the December quarter. The topline was up 2.3% QoQ in US dollar terms and 3% QoQ in constant currency terms.
  • The operating profit decreased by 0.8% QoQ and operating margins fell to 17.7% compared to 18.5% seen in 2QFY16. This was because of higher direct costs in the quarter caused by higher number of holidays in the December quarter.
  • The company's other income fell 24.6% QoQ due to a fall in treasury income.
  • Largely due to the weak operating performance and fall in the other income, the net profit decreased by 4.6% QoQ.
  • The company has paid an interim dividend of Rs 4 per share and completed a 1:1 bonus issue.

Financial performance snapshot

(Rs m) 2QFY16 3QFY16 Change 9MFY15 9MFY16 Change
Sales 11,693 12,145 3.9% 26,438 31,514 19.2%
Expenditure 9,529 9,998 4.9% 21,132 25,733 21.8%
Operating profit (EBITDA) 2,164 2,147 -0.8% 5,306 5,781 9.0%
Operating profit margin (%) 18.5% 17.7% 20.1% 18.3%
Other income (Including forex gain/loss) 195 147 -24.6% 661 690 4.4%
Depreciation 317 345 8.8% 723 970 34.2%
Finance costs 2 0 1 2
Profit before tax 2,040 1,949 -4.5% 5,243 5,499 4.9%
Tax 458 440 -3.9% 760 857 12.8%
Profit after tax/(loss) 1,582 1,509 -4.6% 4,483 4,642 3.5%
Net profit margin (%) 13.5% 12.4% 17.0% 14.7%
No. of shares (m) 167.8
Diluted earnings per share (Rs)* 32.9
P/E ratio (x)* 18.4

*On a trailing 12-month basis

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