Tech Mahindra net soars 90% to Rs 897-crore on margin surge, forex gains
Fifth largest software exporter Tech Mahindra today reported a 90 percent jump in post-tax profit for the three months to March at Rs 897 crore on wider margins from an expanded revenue base, forex gains and lower tax payout.
Mumbai: Fifth largest software exporter Tech Mahindra today reported a 90 percent jump in post-tax profit for the three months to March at Rs 897 crore on wider margins from an expanded revenue base, forex gains and lower tax payout.
While its total revenues grew to Rs 6,883 crore from Rs 6,116 crore a year ago, its pre-tax profit margin expanded to 17 percent from 15.4 percent, lifting the bottom-line for the reporting period.
For the full year ending March, the company's net income rose 18.7 percent to Rs 3,118 crore, while revenue was up 17.1 percent to Rs 26,494 crore.
Chief financial officer Milind Kulkarni explained that the profit margins were pulled down by two acquisitions done in 2014-15, and the turnaround in the acquired companies has helped it post good numbers in the reporting period.
Citing Comviva, which it had acquired in 2012 for Rs 260 crore and performed exceptionally good in the reporting period, chief executive and managing director CP Gurnani said Tech Mahindra has repeatedly shown its capacity to turn around businesses acquired at lower valuations.
The company is currently working to lift the performance of its US-based Lighthouse Communications acquired in 2014 for USD 240 million and shed 20 per cent of the business which was not profitable enough, Gurnani said.
Gurunani said it will take another four quarters for the company to turnaround, while Kulkarni said TechM's ultimate target is to take the profit margin from low-single digit to double-digits for this company.
This US company underwent an organisational restructuring exercise wherein Manish Vyas has been appointed as the chief executive of the business.
For the March quarter, TechM reported a forex gain of USD 9 million as against a loss of USD 1.5 million in the year ago period which helped lift up the bottom-line, Kulkarni said.
The provision for taxes also came down to Rs 157.1 crore from Rs 184.5 crore as the effective tax rate declined to 21 per cent, he said, adding it will go up to 23 percent going forward.