Mindtree had reported its 2nd quarter and mid-year results last week. This business has kept its record of growth in its top line from last 3 quarters. Let’s look at the few important financial metrics from its results so far:

2nd Quarter 2015 Margins % Half Yearly 2015 Margins %
Revenues 884.8 100% 1,725 100%
Cost of revenues 572.2 64.67% 1,110.7 64.39%
Gross Profits 312.6 35.33% 614.3 35.61%
Selling Expenses 162.2 18.33% 321.7 18.65%
Operating profits 150.4 17% 292.6 16.96%
Other Income 25.10 46.80
Net Profits 136.8 15.46% 263.5 15.28%

 

The results of Mindtree are in line to what many analysts are expecting them to report for the year end March 2015 (EPS – Rs 62.84). Looking at their mid-year results they are expected to gain return on the shareholders equity in range of 27% – 29% for the 2015.

We are holding this business from last two years and are almost sitting on healthy returns of around 160% as of closing of yesterday. We are expecting its fair value for the year end 2015 to be in range of Rs 685 – Rs 740. Even after falling down below four digits yesterday, it is still looking expensive to buy or accumulate more in our opinion.