Tech Mahindra’s net profit up 39% to Rs 1,678.4 cr


Tech Mahindra closed FY22 with a standalone profit of Rs 5,566 crore.

Mumbai:

IT services provider Tech Mahindra on Friday reported a 39 per cent jump in its consolidated net profit at Rs 1,678.4 crore for the March 2022 quarter, and expressed confidence that the positive business momentum will continue in the current fiscal.

On a standalone basis, the Mahindra Group company reported a profit after tax of Rs 1,505 crore in the quarter under review, as against Rs 1,081 crore a year ago.

The fifth largest IT services company closed with a standalone profit of Rs 5,566 crore in FY12 as against Rs 4,428 crore in FY11.

Revenue from operations rose to Rs 12,116 crore during the quarter under review as against Rs 9,729 crore in the year-ago period, while foreign exchange growth increased the company’s other income to Rs 320 crore as against Rs 32.6 crore .

The company closed the fiscal quarter with a total contract value of $1 billion and $3 billion in new deals. Company officials said wins during the quarter included 5G operators in Europe and others in sectors such as retail and healthcare.

Its managing director and chief executive CP Gurnani said he is “very confident” about the continuation of business momentum in FY23 as well. Its president for corporate strategy Vivek Agarwal said the company expects its mainstay of communications, media and entertainment as well as the upcoming Metaverse offerings to gain traction in the new fiscal.

Aggarwal said the demand environment is strong and there has been no impact of geopolitical tensions emanating from other developments like Russian invasion of Ukraine or runaway inflation in the US.

Designated Chief Financial Officer Rohit Anand said the company hired 10,000 freshers in FY12, and will continue to operate with a mix of fresher and lateral workforce. The total workforce was 1.51 lakh.

Gurnani said that keeping in mind the supply side issues, the company gave more than one appraisal to the employees and the average salary increase was 10 per cent.

Tech Mahindra Chief Financial Officer Milind Kulkarni said operating profit margin stood at 17.2 per cent, up from 20 per cent in the year-ago period and 18 per cent in the quarter-ago period. He said this was mainly affected by low utilization levels and also supply side issues such as additional wage hikes and retention amounts paid to employees.

Kulkarni said the profit line benefited through a drop in tax rate of over 17 per cent as against 27 per cent. Tax expenditure stood at Rs 136 crore for the quarter under review, as against Rs 511 crore in the year-ago period.

Agarwal said the company has committed $900 million for acquisitions in FY12, and will focus on integrating companies it acquired in the last 18 months in FY13.

Shares of Tech Mahindra on Friday closed 0.93 per cent lower at Rs 1,202.30 per piece on the BSE, as against 0.26 per cent fall in the benchmark index.

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