MindTree sees higher margins in Q4 on rev growth
Mid-sized Indian IT services firm MindTree Ltd said today it sees margins improving in the March quarter as the company completes its restructuring and expects the revenue growth momentum to continue.india Updated: Jan 18, 2011 20:42 IST
Mid-sized Indian IT services firm MindTree Ltd said on Tuesday it sees margins improving in the March quarter as the company completes its restructuring and expects the revenue growth momentum to continue.
The Bangalore-based company had EBITDA margins of 11.7% in the current quarter, compared with 19% the year ago. Margins were flat sequentially.
"We expect margins to improve in the fourth quarter because of the strong traction we are seeing now and there would be no investments in the wireless business" Krishnakumar Natarajan, chief executive and managing director, told reporters on a conference call.
The company, which had once aspired to launch a 3G smartphone on Google's Android platform in the US, incurred restructuring costs of $3.7 million during the quarter.
The restructuring involved converting its wireless business into a design services business. The company has also merged unit MindTree Wireless with itself.
The firm does not expect to incur any further costs on account of the restructuring, it said.
Earlier in the day, MindTree posted a consolidated net profit of 305 million rupees, compared with 537.7 million last year.
A Reuters poll of brokerages had estimated the company to report a profit of 311.2 million rupees.
Revenue jumped 16 % to 3.85 billion rupees.
MindTree said it added 30 new customers during the quarter, taking its total customer count to 269.
"Overall, what we see from our conversations with customers is that customers are getting more positive. The sense we get from them is more positive than what the scenario was 12 months back," Natarajan said.
Shares of the company, which the market values at 20.87 billion rupees, closed up 2.41% at 536 rupees on the BSE.
They have lost a fourth of their value over the last one year.