MindTree Good Mid level IT Stock To Buy

It stocks are not exactly the flavour of the season right now. The financial global meltdown and the collapse of many a financial institutions/banks has raised a lot of questions about the viability of the software companies in India. The financial crisis in the USA is expected to affect the margins of majority of the IT companies in India as almost 60% of all big time companies business comes from USA. And with USA itself slowing down considerably and most of the European countries also getting into recession, it is not a surprise that the going would get tough.
MindTree, global IT and R&D Services company, for the second quarter ended 30th September 2008 has been ok. These Q2 results represented the consolidated and fully integrated results of Aztecsoft. QoQ, software revenues of Mindtree grew 9.1% while 32.5% on a YoY. EBITDA, on a QoQ grew 52.6% and YoY grew 142%. This rise in EBITDA was mainly on account of the depreciation of the rupee. PAT increased by 34.8% YoY, while QoQ, it has turned around from a net loss of Rs.12.96 crore it posted in Q1FY09.

During Q2FY09, it added 22 new customers were added, bringing the current active customer base to 206. It added 321 people on a gross basis during Q2, taking our total people strength to 5,746 as of September 30, 2008. Attrition on a trailing 12-month period has reduced to 15% as compared to 16.3% in Q1 2008-09.

The stock hit a new low on 20th Nov at Rs.221 and is now at Rs.233 levels. This reflects the general low perception for the IT stocks. Mindtree is a good mid level IT company but the slowdown and the expected reduction in prices in new deals and repeat orders is expected to put pressure on the margins.
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