Mindtree, one of the IT companies of the nation, is expected to disappoint the Dalal street on Friday, especially after its profit warning announced in the month of September. According to analysts, polled by a media house, profit is likely to fall 7 per cent quarter-on-quarter (QoQ) to Rs 115 cr in Q2FY17.
Revenue is seen falling 0.3 per cent to Rs 1,324 cr and dollar revenue may decline to US 198 million dollars from US 199 million dollars sequential basis. Operating profit is expected to slip 4.66 per cent to Rs 186 cr and margin may shrink 65 basis points (bps) to 14.05 per cent compared with preceding period. After a good performance in FY14-16, the firm has been going through a period of ambiguity.
It was considered as one of the better mid-cap IT stocks but the second profit warning in six months hurt its credibility. On 2ndSeptember, Mindtree said that it expected Q2FY17 revenue to be less than the previous quarter due to project cancellations, cross-currency movements and slower ramp-ups in a few large clients across various verticals and continued weakness in Bluefin, its UK-based subsidiary. It said that margin was also going to be less than planned with a fall in EBITDA margins in Q2FY17 as compared to Q1FY17 and Bluefin business was estimated to post an EBITDA loss for the quarter. Meanwhile, Mindtree share price closed at Rs.479 on the NSE today.
Vital things to be careful about:
- Outlook for 2HFY17 since it had indicated growth revival
- Senior management exits, its effect on business in the near term and replacements of Radha and Veeraraghavan
- Outlook on margins, that have come off evidently in recent quarters
For details on support and resistance levels of the scrip and also its fundamentals and financials, kindly pay a visit to Mindtree share price history.
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