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Mindtree expects 0.8% decline in Q3 earnings

Analysts see the moderate impact of Chennai floods on earnings.

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Even the company had already toned down expectations with respect to margins at the start of the year, saying margins in FY16 will be suppressed due to continued investments in digital and facilities.
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IT services provider Mindtree says its marginal growth in revenue during October-December third quarter (Q3) will see a 0.8% decline as furloughs this year may be slightly higher than last year.

Dollar revenue is likely to increase 1.22% to $182.5 million (nearly Rs 1,229.14 crore) compared to $180.3 million (nearly Rs 1241.32 crore) in preceding quarter and 1.5% in constant currency. Revenue growth may be driven by the digital business that accounts for close to 37% of revenue.

Analysts see the moderate impact of Chennai floods on earnings. Mindtree has been confident of beating National Association of Software and Services Companies' (NASSCOM) full year revenue growth guidance of 12-14% (in constant currency) for the industry.

It registered a 16.4% growth in dollar revenue in the second quarter (Q2) and 4.8% in the first quarter (Q1). The company will also consider bonus issue along with earnings on January 18, Monday. 

ALSO READ: Chennai floods: 10,000 production units hit; nearly 50,000 lose jobs

Even the company had already toned down expectations with respect to margins at the start of the year, saying margins in FY16 will be suppressed due to continued investments in digital and facilities.

Earnings before Interest and Tax (EBIT) may increase 1.8% quarter-on-quarter to Rs 188 crore and margin may contract 12 basis points to 15.67% in the quarter ended December 2015. 

 

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