Tech Mahindra Q4 net profit declines 7.4%

Tech Mahindra Q4 net profit declines 7.4%
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21 May, 2019

Software services major Tech Mahindra has reported a 7.4% drop in net profit for the March 2019 quarter to Rs 1,132 crore from Rs 1,222 crore a year earlier.

Quarterly revenue grew 10.4% to Rs 8,892 crore from Rs 8,055 crore, the Pune-based IT firm said.

The company has also seen a decline in net profit as well as revenue on a sequential basis. Its net profit was Rs 1,203 crore for the December 2018 quarter while its revenue stood at Rs 8,944 crore.

For the full year ended March, Tech Mahindra reported a 13.1% growth in net profit to Rs 4,298 crore from Rs 3,800 crore. Revenue grew 12.9% to Rs 34,742 crore from Rs 30,773 crore. Digital revenue grew 41%.

“We had a satisfactory year, characterized by significant margin improvements, a growing digital portfolio and a considerable increase in deal wins,” said CP Gurnani, managing director and CEO at Tech Mahindra.

“We are encouraged by the revival of the communications business. Our continued investments into our partner ecosystem for building a unique portfolio of 5G offerings will enable us to address the 'networks of the future' opportunity,” he added.

The company’s margin increased 290 basis points to 18.2% for 2018-19. Its board proposed a dividend of Rs 14 per share.

“It has been a year of overall operational performance improvement on various fronts, leading to a significant expansion in EBITDA margin year on year. We initiated our maiden share buyback program on the back of a healthy cash conversion during the year," said Manoj Bhat, chief financial officer, Tech Mahindra.

Tech Mahindra's total headcount grew by 8,275 to touch 1,21,082 at the end of March 2019. The company's cash reserves stood at $1.4 billion at the end of March.

The Tech Mahindra board also approved a proposal to merge two companies with the parent—Tech Mahindra Growth Factories Ltd and Dynacommerce India Pvt Ltd, the company said in a BSE filing.

Tech Mahindra Growth, a wholly owned subsidiary of the company, was created to bring new business avenues including education and training services for corporate or working professionals and students. Its revenue was Rs 8.5 crore for 2018-19.

Dynacommerce is a research and development unit providing software designing, development, customisation, implementation, maintenance, outsourcing, testing and benchmarking services. Its revenue was Rs l7.75 crore for 2018-19.