Mindtree Q1 Net dips 1.5%,sees single-digit growth this fiscal

IT firm Mindtree posted a 1.5 per cent drop in consolidated net profit at Rs 121.7 crore in the June quarter, impacted by currency volatility, visa costs and one-time impact on business of one of its subsidiaries.
The "temporary volatility" in the subsidiaries' businesses has promoted Mindtree to slash its revenue growth outlook to "high single-digit" from the earlier projection of double-digit rise in top-line.
Its total income increased marginally to Rs 1,354.9 crore in June quarter from Rs 1,347.4 crore in the year-ago period.
Mindtree CEO and Managing Director Rostow Ravanan said the company continues to maintain a steady momentum with a strong pipeline and multi-year, multi-million dollar wins.

"However, due to the performance of the subsidiaries both Magnet360 and Bluefin, mainly due to one-off incident in one of the clients project, it pulled down (profit) on a consolidated basis," he said on a conference call.
The company, in a regulatory filing, said it has entered into a payment resolution agreement with the erstwhile shareholders of one of its subsidiaries.

"Consequently, Rs 374 million representing liability no longer required and written back has been recognised under other income," it added.
The financial results were announced after the trading hours. The shares of Mindtree closed marginally lower from the previous close of Rs 506.75 apiece on BSE.

At the end of June, Mindtree had 336 active clients and 16,561 employees. In dollar terms, Mindtree's net profit grew 2 per cent to USD 18.9 million in the said quarter, while revenue was up marginally to USD 200.1 million from the year- ago period.
On the growth outlook, Ravanan said the company was seeing some "temporary volatility" in its acquired entities -- Bluefin and Magnet360.
"...Which is causing us to revisit our guidance for growth for this year. We believe we will not achieve the double-digit growth that we foresaw in the beginning of the year and feel it will be in the high single-digit growth at this point in time," he added.

IT body Nasscom expects India's software export revenue to grow 7-8 per cent in financial year 2017-18.
The mid-sized IT firm said about 70 per cent of its employees -- which comprises the younger executives -- will get salary hikes effective July 1.
Employees in India will see their pay packages growing by about 5.5 per cent on an average, while for overseas workers, the hike will be to the tune of 1.8 per cent.
"Wage hikes will have a 1.5-2 per cent impact on the margins, similar to the impact of visa costs," Mindtree CFO Jagannathan Chakravarthi said.
Ravanan explained that while the company had applied for a lesser number of visas, it has received approvals for more visas compared to previous years and therefore, the impact on margins will be to the tune of 1.5-2 per cent.

The US accounted for about 70 per cent of Mindtree's revenues, followed by Europe (21.1 per cent), India (3 per cent) and Rest of the World (6.3 per cent).
Mindtree will also commence a buyback offer of up to 43.20 lakh equity shares for an aggregate consideration of Rs 270 crore once it gets the necessary approvals. The record date for the buyback is July 11, 2017.