Shares of software firm Mindtree fell about 17 percent on Friday after several brokerages reduced their target price following disappointing quarterly results.

Meanwhile reports suggested that the Trump administration was looking to tighten H-1B visa norms, largely availed of by Indian IT companies. This further weighed on the software makers, including Mindtree.

Rostow Ravanan, MD and CEO of Mindtree, spoke to CNCB-TV18 about the earnings and the potential impact of changes in visa norms on the company.

“Some of the changes that are being proposed aren’t clear to us as yet. Watching it fairly closely and we can probably make a more informed assessment only when we get the details but pending that, I think our business model is significantly de-risked from the vagaries of the Visa regimes. We have a fairly robust mechanism to recruit and retain talent in all the markets that we operate in. So barring something as extreme, I think that the business is in a fairly insulated from some of these changes,” said Ravanan.

On project deferral in CPG vertical, he said, “At this time, we haven’t seen any project cancellations. That is common to us largely in the context of the performance of our retail CPG and manufacturing vertical in this quarter while all the other verticals grew, that vertical alone declined by about 3 percent in this quarter on the back of two things – one very large project which we were doing for customers in that vertical came to an end and some of the deals that you were pursuing very actively in that vertical, the decision got deferred to Q3. So there is a minor quarter-to-quarter kind of a shift only in that vertical, Europe geography. The rest of the business continues to be on a very good momentum.”

Ravanan reiterated confidence in the company's prospects and said that, “Nothing has changed the confidence for Mindtree. We are reiterating our forecast full year this year, Mindtree will do significantly better than the industry. H1 this year compared to H1 last year is 19 percent growth. H2 last year was a very strong growth. Nothing has changed the growth trajectory for Mindtree. But some factors have changed in the external environment."

Talking about how the business will gain from rupee's depreciation, Ravanan said, “The benefit of currency is definitely giving some benefit to us. The bottomline at an EPS level was significantly higher even beyond the currency impact there. So overall we are quite positive on our margins and we definitely recognise that we need to do more. If all goes well, Q3 will be slightly better than Q2 as well. The whole year this year, we are reiterating the commentary we gave in the beginning of the year that full year FY19, margins will be better than FY18."

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