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Mindtree Shares Plunge To 52-Week Low On Revenue Warning
Shares of Mindtree plunged to 52-week low on Tuesday after the company said that it expects revenue to be lower than the previous quarter.
Mindtree has implemented a range of operational efficiency improvements and cost control measures. The savings derived from these initiatives may not be sufficient to offset the revenue slowdown in Q2 FY17.
"The decline is expected due to cross-currency movements, project cancellations and slower ramp-ups in a few large clients across different verticals and continued weakness in its UK-based subsidiary Bluefin", the company said in the filing.
Margins are going to be lower than planned with a decline in EBITDA margins in Q2 FY17 compared to Q1 FY17. In light of its weak revenue outlook, the Bluefin business is expected to report an EBITDA loss for the quarter, the release added.
The uncertainties in the Bluefin business are likely to continue for a few more months given the volatile macroeconomic environment in Europe. The slower revenue momentum in H1 FY17 will delay the aspiration to grow EBITDA margins over FY16.
The company believes its business fundamentals, strategic direction and market positioning continue to look strong in the medium-term especially with its investments in Digital and Managed Services.
Shares of Mindtree were seen trading at Rs 513, lower by 6.71 per cent on BSE at 11.00 am IST. It touched an intra-day low and 52-week low of Rs 507 during trade.
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