Mindtree reported largely in-line results in 3QFY15, with revenue growth of 2% QoQ in constant-currency terms and EBIT margin expansion of 50bps QoQ to 17.6%. Key highlights are (1) the company has announced a US$15mn acquisition of a company specialising in the property and casualty (P&C) insurance domain; (2) LTM attrition rose significantly during the quarter (up 240bps QoQ) and (3) top 10 clients grew slower than company average for the third straight quarter. The management commentary on the growth outlook was also strong.
It continues to see strong traction in its top-10 clients and the recent changes in its sales and marketing spend should continue to bear fruit. Whilst revenue momentum may remain strong in the near term, the stock currently trades at 19x one-year forward earnings (consensus), a significant premium to its own history (11x).
