Mindtree shares slipped as much as 7 per cent on Tuesday after it announced that the company expects Q2 FY17 revenue to be lower than the previous quarter. The decline is expected due to cross-currency movements, project cancellations and slower ramp-ups in a few large clients across different verticals and continued weakness in its UK-based subsidiary Bluefin. At 9.37 am, shares of Mindtree were trading 6.85 per cent down at Rs 512.25. The scrip opened the day at Rs 525 and has touched a high and low of Rs 525 and Rs 511.20, respectively, in trade so far. Later, share price of the company ended 5.13 per cent down at Rs 521.70.
In a BSE filing, Mindtree said, “Margins are going to be lower than planned with a decline in EBITDA margins in the second quarter of 2016-17 compared to first quarter. In light of its weak revenue outlook, the Bluefin business is expected to report an EBITDA loss for the quarter. Mindtree has implemented a range of operational efficiency improvements and cost control measures. The savings derived from these initiatives may not be sufficient to offset the revenue slowdown in Q2 FY17.”
“The uncertainties in the Bluefin business are likely to continue for a few more months given the volatile macroeconomic environment in Europe,” Mindtree added.
For the quarter ended June 30, 2016, Mindtree reported a consolidated net profit of Rs 123.50 crore, down 20.83 per cent, against Rs 156 crore in the sequential quarter ended March 31, 2016. Gross sales of the company inch up 0.26 per cent on quarter-on-quarter to Rs 1327.60 crore against Rs 1324.20 crore in the sequential quarter ended March 31, 2016.