Bangalore-based Mindtree on Wednesday will focus later in the day ahead of its financial performance for the quarter ending June 30, 2022 (Q1FY23). Shares of Mindtree witnessed buying sentiment on the first day of quarterly results. In Q1FY23, the BFSI segment continues to see strong performance coupled with improvement in verticals, and a healthy pipeline that is likely to pick up constant currency growth of 4-5% sequentially. The company’s revenues are expected to remain under pressure due to currency headwinds in dollar terms. Some impacts are predicted in the retail segment. In addition, the EBIT margin may decline in the quarter.
on BSE, Mindtree shares closed 2,855.45 each 40.80 or 1.45% on Tuesday. Shares have touched intraday highs and lows 2,889.05 each and 2,795.65 each respectively. its Market hat is currently around 47,068.89 crore on the exchange.
For FY 2012, Mindtree reports 48.8% growth in net income 1,652.9 crore as compared to the previous financial year. Revenue climbed 31.1% year-over-year 10,525.3 crores. In dollar terms, revenue grew 31.1% to $1,410.8 million, while net income grew 47.7% year over year to $221.6 million.
What should you expect from Mindtree’s Q1 results for FY23?
Aditi Patil, Research Associate at Prabhudas Lilladher said, “We expect 4% QoQ USD, 5% QoQ CC growth on the back of strong growth in BFSI, CMT, TTH and Healthcare verticals. Within CMT, the top client also expects strong growth. The rate is expected,” adding, “RCM’s performance is expected to remain muted due to ramp-down of one client and softening of exposure to Russia, Ukraine and China in the other.”
“Q1 is a seasonally strong quarter for Deal TCV due to deal renewal. TCV in Q1FY23 is expected to be in line with Q1FY22 TCV,” Patil said. On operating margin, she said, “we expect EBIT margin to decline by ~90bps QoQ due to headwinds from visa and travel costs and one-time expenses related to the merger.”
Investors will look at – 1) progress on mergers and revenue synergies, 2) any delay in execution or close of deal due to challenging macro environment, 3) EBITDA margin above 20% given high onsite wage inflation measures to maintain, and 4) outlook on pricing T10 accounts and contracts.
Sameer Pardikar, Research Analyst, ICICI Direct said, “The company is expected to register 5.0% QoQ growth in terms of CC mainly due to ramp-up of deals in BFSI, improvement in travel vertical and healthy growth in top clients, But there will be some impact in retail. In dollar terms, revenue is expected to be 4.5% QoQ on account of 50 bps cross-currency headwind. Rupee revenues are expected to grow at 6.9% QoQ, aided by depreciation of rupee. EBIT margin is expected to decline 90 bps on account of QoQ merger related costs, Visa costs, and one-time expenses related to any event in the quarter.
ICICI Securities expects Mindtree revenue to come 3,096.3 crore, 35.1% year-on-year and 6.9% quarter-on-quarter. PAT is seen 481.3 crores up 40.2% year-on-year and 1.7% quarter-on-quarter. EBITDA is expected to be on 626.9 crore 35% yoy and 3.1% qoq.
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