Mindtree Ltd's Q1FY20 consolidated net profit declines 53.3% qoq to Rs93cr : Misses Estimates

The company’s consolidated revenue stood at Rs1,834cr, down 0.3% qoq but up 11.9% yoy.

July 17, 2019 6:11 IST | India Infoline Research Team

Mindtree Ltd Q1FY20

Consolidated Results Q1FY20: (Rs in cr)

Q1FY20 QoQ (%)
Revenue 1,834.20 [0.3]
EBIT 117.20 [50.7]
EBIT Margin (%) 6.4 [652]
Net Profit (adjusted) 92.70 [53.3]
***EBIT margin change is bps
Mindtree reported numbers came in below expectations for Q1FY20. Revenue in Indian Rupee terms declined by 0.3% qoq to Rs1,834cr, which is lower than median consensus estimate of Rs1,855cr. Revenue in USD terms came in at USD264.2mn, up 0.8% qoq. EBIT stood at Rs117cr, down 50.7% qoq, which is lower than median consensus estimate of Rs209cr. EBIT margin contracted by 652bps qoq to 6.4%. PAT declined by 53.3% qoq to Rs93cr against median consensus estimate of Rs174cr.
  • Revenue in constant currency terms grew by 1.1% qoq.
  • Travel & Hospitality grew by 3.3% qoq, while Retail, CPG & Manufacturing grew by 0.8% qoq. Hi-Tech and Media grew by 0.3% qoq. BFSI declined by 0.1% qoq.
  • Digital business grew by 3.6% qoq.
  • Growth in Top client was 2.4% qoq, Top 5 clients grew by 2.1% qoq and Top 10 clients grew by 1.1% qoq.
  • Amongst geographies, US grew by 1% qoq, India grew by 11.7% qoq and RoW grew by 5.6% qoq. Europe declined by 3% qoq.
  • $5 million clients grew by 1, taking the count to 46. There were 12 new clients added during the quarter.
  • Utilizations excluding trainees improved to 77.2% from 75.3% in Q4FY19. DSO improved from 70 in Q4FY19 to 66 in Q1FY20.
  • Total Contract Value signed (TCV) deal wins worth USD324mn in Q1FY20, which is at an all-time high level.
  • Margins were impacted on account of higher employee cost, which was up by 578bps qoq (% of sales). Depreciation was also higher by 132bps qoq, which can be attributed to transition to Ind AS 116.

Technical View:

Mindtree Ltd ended at Rs. 751.95, up by 2.6 points or 0.35% from its previous closing of Rs. 749.35 on the BSE.
The scrip opened at Rs. 755.85 and touched a high and low of Rs. 761.25 and Rs. 741.60 respectively. A total of 11,84,317 (NSE+BSE) shares were traded on the counter. The stock traded above its 100 DMA.

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