Mindtree stock slips 5% despite healthy Q3 earnings

Mindtree share price slipped over 5% today despite the firm reporting a healthy set of earnings in Q3 of the current fiscal. The IT services company posted a 34% rise in consolidated net profit at Rs 437 crore for the quarter ended December 2021 against Rs 326 crore logged in the same period last year.

The stock has fallen after 3 days of consecutive gain. The share opened with a loss of 2.19% at Rs 4,640 on BSE.

It touched an intraday low of Rs 4477.25, falling 5.62% on BSE. The share trades higher than 100 day and 200 day moving averages but lower than 5 day, 20 day and 50 day moving average.  

However, the share has gained 161% in one year and  lost 4.75% since the beginning of this year. Total 0.77 lakh shares of the IT firm changed hands amounting to turnover of Rs 35.06 crore on BSE.

Market cap of the firm fell to  Rs 75,278 crore. On Thursday, the stock closed at Rs 4,743.80

The stock hit a 52-week high of Rs 5,059 on November 18,2021 and a 52 week low of Rs 1,539.85 on February 24, 2021.

Revenue from operations rose 35.89% to Rs 2,750 crore against Rs 2,023 crore in the same period last year.

Earnings before interest and taxes (EBIT) came in at Rs 528.9 crore, a margin of 19 per cent.

The company stated it secured deals worth $358 million in the December quarter (Q3 FY22) as against $360 million in the preceding quarter, whereas its attrition rate jumped 4.2% quarter-on-quarter (QoQ) to 21.9 per cent.
"We are pleased to have continued our positive revenue momentum through the third quarter of FY22 on the back of robust demand, aggressive customer mining, and end-to-end digital transformation capabilities," said Debashis Chatterjee, CEO and MD, Mindtree.

Motilal Oswal is optimistic on the prospects of the firm.

"Mindtree delivered healthy QoQ growth (following a very strong quarter) and margin beat (100bps expansion) was the highlight of the quarter. We maintain our revenue/EPS estimates for FY23/24E. Our target price of Rs 5,060 is based on 37x Mar-24E EPS (25% CAGR over FY21-24E on a high base in FY21 of >70%). Maintain ADD," the financial services firm said.