Mindtree hits 52-week low on disappointing Q1 results
A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai (pic: Reuters)
Mindtree has slipped 7% to Rs 572, also its 52-week low on the BSE, after the company reported 7% quarter-on-quarter (QoQ) decline in consolidated net profit at Rs 124 crore for the quarter ended June 30, 2016 (Q1FY17).
The mid-sized information technology (IT) services company had registered profit of Rs 133 crore in March quarter (Q4FY16) and Rs 128 crore in June 2015 quarter.
Income from software services stood at Rs 1,328 crore in Q1FY17 against Rs 1,320 crore in Q4FY16.
In US dollar terms, net profit declined 5.8% QoQ at $ 18.5 million, while revenues grew 2% at $199 million on a sequential basis.
“While the global environment poses some short term challenges, we remain confident that our investments are on the right track to accelerate growth for our clients and Mindtree," said Rostow Ravanan, CEO & Managing Director, Mindtree.
Mindtree’s June’16 quarter results missed expectations on all fronts. A 1.1% QoQ constant currency revenue growth was lower than expectations of 3.1% QoQ with margins slipping by around 200 basis points QoQ despite no headwinds from annual wage increments, analysts at Emkay Global Financial Services said in results update.
Company’s FY17 revenue/margin outlook appears like a tall task in our view given weak macro environment and a high dependence on H2 recovery, the report suggests.
At 09:39 AM, the stock was down 6% at Rs 576 on the BSE, as compared to 0.16% decline in the S&P BSE Sensex. A combined 1.38 million shares changed hands on the BSE and NSE so far.