L&T bid may hit Mindtree Q1 numbers as clients defer deals

Bengaluru: MindtreeNSE -1.21 % may see growth slow down in the April-June period as clients defer deals by at least three months seeking stability amid a takeover bid by Larsen & Toubro, two people aware of the matter told ET.

The mid-tier IT services company grew 16 per cent in the fourth quarter of the previous fiscal year, touching revenue of $262 million. The Bengaluru-based company posted 4 per cent growth on a sequential basis in constant currency terms.

“Multiple large deals for Mindtree may have been pushed by at least a quarter as clients wanted to have clarity on which way the ownership goes and if there are management changes,” said one of the two people.

Microsoft is Mindtree’s top client, helping the software exporter’s clients migrate to its Azure cloud platform, which is seeing growth. The remaining top 10 clients, however, have deferred spending due to the uncertainty surrounding the IT services firm after the engineering conglomerate’s hostile takeover bid.

“We have heard the management saying uncertainty can lead to softness in deal closure,” said an analyst who tracks Mindtree who did not want to be named as he is not authorised to speak to the media.

The diversion of the Mindtree management’s attention to thwart L&T’s takeover instead of focusing on clients has also contributed to the softness, one of the two people mentioned above said.

Deferred closure of large deals means billing delays will impact the company’s profits, ..