Tech Mahindra September quarter Net up 57.6% at Rs 718.4 cr
Mumbai: IT services firm Tech Mahindra Thursday posted a 57.6 percent growth in consolidated net profit at Rs 718.4 crore for the second quarter ended September 30, aided by growth across verticals especially retail, travel and logistics and uptick in demand from Europe.
The company had posted a net profit of Rs 455.8 crore in the July-September quarter of 2012-13 fiscal, it said in a statement.
Consolidated revenues of India's fifth largest software services exporter grew 35.4 percent at Rs 4,771.5 crore in the second quarter this fiscal from Rs 4,103.2 crore in the year-ago period, it added.
The company said it has not obtained the audit opinion on the merged entity's consolidated financials for Q2 2012-13 fiscal.
In June this year, Tech Mahindra had announced completion of Mahindra Satyam's merger with itself to a firm with a turnover of USD 2.7 billion.
On a quarter-on-quarter basis, Tech Mahindra's net profit rose 4.7 percent, while revenues were up 16.3 percent.
Commenting on the earnings, Tech Mahindra Executive Vice Chairman Vineet Nayyar said: "I am confident of our alignment with the needs of next generation consumers, with industry best practices and core strengths that our solutions bring."
The Digital World is the next phase of the company's growth and Tech Mahindra is ready to ride that wave, he added.
In US dollars, the company posted revenues of USD 758 million (up 17.6 percent y-o-y and 4.7 percent q-o-q), while net profit stood at USD 114 million, up 36.4 percent y-o-y.
The firm's q-o-q revenues growth of 4.7 percent is in line with industry expectations as well as with its peers.
During the July-September quarter, TCS saw dollar revenue rising 5.4 percent sequentially, while that of Infosys, HCL Technologies and Wipro grew by 3.8 percent, 3.5 percent and 2.7 percent, respectively.
"The winning trio for us this quarter -- growth across verticals, regions and practices -- reflects Tech Mahindra's new found energy and alignment to win large deals, as well as participate with customers in their transformation journey," Tech Mahindra Managing Director and CEO C P Gurnani said.
Tech Mahindra's judicious investments in building connected solutions and relentless focus on enhancing customer experience is showing results, he added.
The firm's total headcount stood at 85,234 with software professionals at 55,432, BPO at 23,225 and sales & support at 6,577 for the period under review.
Tech Mahindra reduced its debt by Rs 412 crore to Rs 335 crore as of September 30, while cash and cash equivalents stood at Rs 3,273 crore for the same period.
Tech Mahindra's active clients stood at 576 in Q2 2013-14 fiscal against 567 in the April-June of the same fiscal. It added nine clients during the quarter, including one client of USD 20 million and 2 clients of 10 million each.
On the macroeconomic view, Nayyar told reporters here that there has been a relief with the fiscal crisis being resolved in the US and a resurgence of confidence in Europe, which has started to better.
"The companies in Europe are looking for cheap and cost effective services, something which the India IT firms are known for. Besides, rest of the world is growing, especially there is good potential in Australia and Africa," he added.
On the verticals, Gurnani said: "Retail, travel and logistics have done extremely well. We got two large deals, one from Volvo and other from a company in the US."
Revenues from Europe grew 6.8 percent during the second quarter this fiscal, while the US and rest of world rose 1.5 percent each, quarter-on-quarter, he said.
Media and entertainment technology segment saw 3.8 percent growth, whereas, BFSI segment witnessed 5.5 percent and telecom 2.7 percent sequential growth, Gurnani said.
Tech Mahindra reported consolidated forex loss of Rs 26 crore during the second quarter against a gain of Rs 134 crore in first quarter.