MindTree’s Q4FY10 – Strong Quarter
April 28, 2010
MindTree revenues of US$74.5m were up 5.7% qoq and 9.7% yoy (Exp: US$ 72.2m) – volume growth was flattish while realization improved on the back of productivity gains in fixed price projects. In INR terms, revenues of Rs3.4bn grew 4% qoq and 2% yoy. EBIT margin declined by ~110bps qoq – management indicated that this was primarily due to stronger INR, provision for higher leaves (US$ 0.7m), investment into handset business (US$ 0.6m), hardware pass-through cost (US$0.7m), higher SG&A spend. Productivity gains in fixed price projects partially compensated for the headwinds and one-off items. Net profit of Rs545m grew 1% qoq and 190% yoy.
Company has made acquisition of 7Strata – remote infrastructure services focused, domestic IT services company – effective 1st May. Company has paid Rs72m (US$1.6m) for revenues of ~US$1m, 90 employees, 12 clients and infrastructure management software platform – Rapid. MindTree plans to use Rapid platform for its global clientele.
Handset business: Company plans to invest up to US$10-11m over next 2 quarters into this business – up from earlier plans of US$8-10m. Company plans to launch the first Android based GSM handset by Q3/Q4 of FY11 in India/ US.