MindTree's Q4 profit down 47 per cent, but expects recovery

28 April 2009

Information Technology firm MindTree Ltd on Monday posted a 47 per cent fall in quarterly profit, hurt by mark-to-market losses. The company also reported around 55.5 per cent fall in its net profit to $11.4 million for the financial year ending 31 March, though its revenues for the period grew 46.1 per cent to $269.1 million during the year. It forecast flat revenue and higher profit in the current fiscal year, as it sees a recovery in the second half.

The Bangalore-based MindTree offers software and research and development services, and counts US insurer AIG and Swedish truck maker Volvo among its major clients. It expects income to grow to $290-$300 million during year ending March 2010. On this, the firm expects to post a profit of $37.7-$39 million, it said in a statement.

''Our new organisational structure and focus on new business areas will help us withstand the economic crisis and continue on the path to become a $1 billion company over the next few years,'' said MindTree executive chairman Ashok Soota in Bangalore.

While bigger rivals, such as TCS and Infosys, continue to chase large outsourcing contracts of $100 million and above, MindTree aims at smaller contracts from customers like Arcelor Mittal, which it hopes will continue to give projects worth up to $50 million. The company said it added 22 customers during the quarter.

''IT spending of customers this year is flat, there is increased pricing pressure but we are seeing larger size deals coming. The deal size is $30-$50 million in a time period of three-five years,'' said Anjan Lahiri, president and chief executive officer of Mindtree.

The company has around 7,866 professionals on its payroll, and plans to add another 250 by October this year. The company also said that it would invest around $20.5 million towards capital expenditure this year, up from $11.5 million last year.