HomeMarket NewsStocks NewsMindtree shares surge 11% post Q4 earnings; brokerages remain cautious

Mindtree shares surge 11% post Q4 earnings; brokerages remain cautious

Shares of Mindtree surged 11 percent on Monday after the company posted a 4.6 percent jump in its Q4 net profit to Rs 206 crore.

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By Pranati Deva  April 27, 2020, 2:30:35 PM IST (Published)

Mindtree shares surge 11% post Q4 earnings; brokerages remain cautious
Shares of Mindtree surged 11 percent on Monday after the company posted a 4.6 percent jump in its Q4 net profit to Rs 206 crore. It had reported a profit of Rs 197 crore in the quarter ended December 2019.


Revenue of the company rose 4.3 percent at Rs 2,050.5 crore versus Rs 1,965.3 crore, QoQ. The company’s dollar revenue rose 1.2 percent at $278.4 million and it declared a dividend of 100 percent (Rs 10 per equity share of the face value of Rs 10/- each) for FY20.

The stock was trading 11.12 percent higher at Rs 867.75 per share on the BSE at 2:26 pm.

Despite a surge in stock price, brokerages remained cautious on the stock. Macquarie maintained 'underperform' call and cut target to Rs 670 from Rs 734. The Q4 is weaker than expectations despite no impact of COVID on revenues, while high exposure to travel & hospitality will hurt the company significantly in H1 FY21, it said. It also lowered its FY21-22 EPS estimates by 9-22 percent.

Meanwhile, Kotak Institutional Equities also maintained a 'reduce' call on the stock with the target at Rs 760 per share. It expects an EBITDA margin of 15.6 percent in FY21 and a revenue decline of over 6 percent in Q1FY21.

Mindtree was able to get to a margin run rate of 17-18 percent by the end of FY20 and the philosophy of maintaining margins within a band will continue even during the ongoing coronavirus pandemic, CEO Debashis Chatterjee told CNBC-TV18 in an interview.
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