Mindtree logo sits on one of its campus in Bengaluru, India( Photographer: Nishant Sharma/BloombergQuint)

Here’s Why Mindtree Plunged The Most In Seven Years

Mindtree Ltd. fell the most in seven years today despite the company meeting estimates for the quarter ended September and posting double-digit profit growth.

Brokerages have raised red flags about the Bengaluru-based IT services provider’s macro outlook. The firm’s U.K. clients were engaging in short-term extensions to existing contracts rather than longer-term programmes due to uncertainties such as Brexit, Motilal Oswal said in a research report. Credit Suisse said the company’s commentary was cautious on the macro situation and financial services.

However, Chief Executive Officer Rostow Ravanan said analysts’ concerns don’t reflect the views of the management, while adding that growth momentum would sustain for the fiscal’s next two quarters. “Operational management works with a different time horizon and expectations compared with the investor community.”

“That mismatch (between analysts and management) occasionally shows in the stock reactions,” Ravanan said in an interaction with BloombergQuint.

Customer confidence and talent base will help the company navigate through worsening macro uncertainties due to the U.S.-China trade tensions and Brexit, he said.

Key Highlights (QoQ):

  • Net profit up 30.4 percent at Rs 206.3 crore.
  • Revenues rose 7.1 percent to Rs 1,755.40 crore.
  • EBIT up 21.9 percent to Rs 229.5 crore.
  • Margins expanded 160 basis points to 13.1 percent.

The stock closed fell over 16 percent to end at Rs 813.90.

Watch the interaction