The Hindu Business Line : MindTree posts Rs 13-cr loss in Q1

Bangalore, July 16 MindTree Ltd, an IT and R&D services company, reported a net loss of Rs 12.96 crore in the first quarter, largely hurt by a depreciating rupee, pulling its stock down more than 4 per cent.

For the quarter, the revenue increased 37.6 per cent to Rs 222 crore from Rs 162 crore in the year-ago quarter, the company said in a statement. It had reported a net profit of Rs 20.62 crore in the year-ago quarter.

The sudden depreciation of the rupee resulted in a provision of $12 million on MindTree’s outstanding derivative instruments, which led to the loss, MindTree said in a statement.

Shares of the company fell by Rs 14.90 to Rs 341.65 on Wednesday on the Bombay Stock Excahnge.

Forex lossses

Foreign exchange losses for the quarter were Rs 50.10 crore, compared with Rs 37 lakh in the corresponding period last year, the company said. It said it has hedged Rs 7.88 crore at Rs 40.97 to a dollar for the year.

However, MindTree maintained its full year outlook and said it expects to meet the forecast. In April, the company had said for fiscal 2009 it expects PAT (profit after tax) to be in the range of $31.7million to $33.1 million. It had forecast software revenue of $228 million to $238 million for the period.

‘Impressive’ growth

MindTree would make up its loss and achieve its guidance, said Mr Krishnakumar Natarajan, Chief Executive. “We are pleased that even in the current uncertain global economic conditions, we have managed to show impressive revenue growth,” he added.

“We continue to see good traction for both IT Services and R&D Services businesses and are confident of achieving our revenue and profit guidance for the year,” Mr Natarajan said.

The company said it added 20 new clients in the first quarter and 337 employees on a gross basis, taking the total employee strength to 5717, as of June 30. The current active customer base is 196, it added.

Stable pricing

The pricing environment remains stable, said Mr Ravanan Rostow, Chief Financial officer. The company would maintain a positive trend in the operating margins, he added.

Including trainees, the utilisation rate increased to 65.6 per cent from 62.8 per cent in the last quarter, Mindtree said. Excluding trainees, it dropped to 65.6 per cent from 66.7 per cent in the last quarter.

Revenue from IT services was Rs 176 crore for the quarter, compared to Rs 125 crore in the year-ago quarter.