Tech Mahindra, India’s fifth largest IT company, has more than tripled its consolidated net profit to ₹1,010 crore for the third quarter ended December 31, 2013 as against ₹321 crore for the same quarter last year.
While the jump includes an exceptional item, without it, the net profit was ₹663 crore, up 106 per cent year-on-year, according to Vineet Nayyar, Executive Vice-Chairman, Tech Mahindra.
Consolidated revenue increased by 34 per cent to ₹4,898 crore (₹3,668 crore) due to all-round growth across its operating geographies and services. “We reported a successful quarter where growth has come from telecom, manufacturing and BFSI,” Nayyar told newspersons at the company’s campus in Sholinganallur, where nearly 6,000 employees work.
“Our performance is linked with the performance of the global economy. We are seeing not only green shoots but we are seeing actual blossom,” he said. The US continues to grow strongly, Europe has passed through its worst stage and is moving on an upward trajectory though its growth levels are still not as they used to be, said Nayyar.
On Europe, he said the positive thing is that clients there want to be competitive and are looking at cost-effective solutions.
Ankita Somani, IT Research Analyst at Angel Broking, said the results surprised positively on the revenue front and were in line with expectations on the operating margin side.
Growth was aided by revenue from the recent acquisition of Mahindra Engineering Services (MES), she said.
HeadcountThe net addition of 2,165 employees was the highest in last nine quarters due to the acquisition of MES, Somani added.
The Americas contributed 47 per cent of Tech Mahindra’s total revenue while Europe’s contribution was 31 per cent, during the third quarter. The company is also focussed on the Africa market, which has large potential, said Managing Director and CEO C.P. Gurnani.
The company ended the third quarter with a total employee strength of 87,399, a net addition of 2,165 from the previous quarter.
The software professional headcount was 57,601; BPO was at 23,213; and sales and support at 6,585, said a press release.
The company’s board, which met for the first time in the new campus, approved an increase in Tech Mahindra’s FII limit to 48 per cent from the present 45 per cent.
At an Annual General Meeting in September, shareholders had given the board authority to increase the FII shareholding limit to 49 per cent.
On Tuesday, Tech Mahindra shares inched up 0.28 per cent on the BSE to close at ₹ 1,769.50.