Mindtree net surges 59%; buys US firm for $15 m

By: | Published: January 20, 2015 3:44 AM

Mindtree, the Bengaluru-based mid-tier IT services company, has reported a 59% year-on-year rise in net profit for the third quarter.

Mindtree, the Bengaluru-based mid-tier IT services company, has reported a 59% year-on-year rise in net profit for the third quarter. It also announced the acquisition of a US-headquartered technology firm, Discoverture Solutions, for $15 million in an all-cash deal. Sequentially, net profit grew 2.5%.

Mindtree posted a net profit of Rs 141 crore in the third quarter of FY15. Revenue during the period stood at Rs 912 crore, registering year-on-year (YoY) growth of 15.3%.

Krishnakumar Natarajan, CEO, Mindtree, who expressed optimism on the company’s growth prospects for the fiscal, said, “We will comfortably exceed Nasscom’s upper-end industry guidance of 13-15%.”

Mindtree signed deals worth $152 million during the quarter, of which $106 million came from the renewal category. Natarajan said the deal pipeline remains healthy, and it was quite strong in the case of North America.

In US dollar terms, net profit touched $22.8 million, y-o-y growth of 60.5% while revenue rose to $147.7 million, yearly growth of 16.2%. IT services reported an employee strength of 13,323 at the end of the December quarter, adding 1,016 people during the period.

Mindtree’s operating profit margin improved to 20.5% in the third quarter against 19.5% in the year-ago period. Rostow Ravanan, CFO, said the company’s performance was largely due to operational efficiencies and cost management.

On the acquisition of Discoverture Solutions, Mindtree will get about 15 customers and over 300 employees. The US company, founded in 2002, also has a centre in Bhubaneswar with over 200 employees.

Natarajan said Discoverture has a quarterly revenue run rate of $3.5 million and its operating profit margin is in line with Mindtree’s.

Discoverture provides IT services and solutions in the property and casualty insurance and healthcare segment.

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