IT services provider Tech Mahindra reported a 12.4 per cent increase in profit after tax as the company’s cost-cutting measures start to bear fruit.
Net profit of ₹897.8 crore in the quarter ended June, a 12.4 per cent increase from the same period last year.
Revenue rose 12.8 per cent to ₹8,276 crore from ₹7,336 crore last year. Revenue in dollar terms was up 7.5 per cent from the same quarter last year to $1,224 million.
However, compared with the sequential quarter, revenue was marginally up at 2.8 per cent while profit after tax dropped 26.5 per cent. This was primarily attributed to the seasonal weakness in the company’s telecom business, led by a sharp decline at Comviva. Overall, the telecom revenues, which make up over 39 per cent of Tech Mahindra revenues, declined 6.5 per cent. CP Gurnani, Managing Director and Chief Executive Officer, Tech Mahindra, said. “The overall business growth trajectory for the FY19 is on track. While business seasonality has affected the current quarter, our Run Change Grow Strategy with strong focus on digital transformation is keeping the business buoyant. The changing demand landscape for next generation technologies is going to fuel the digital business further.”
Gurnani further said that he expects the telecom revenues to get back to growth with the help of new deal wins and momentum picking up for 5G services across the globe.
Tech Mahindra said the results were also impacted by the wage hikes and investments made in future technologies. Overall, the company hired 745 new employees in the quarter, with 13 new active clients added.
The company also announced that Vice-Chairman Vineet Nayyar has decided to retire.
“I would like to thank Vineet Nayyar for his leadership, guidance and immense contribution towards Tech Mahindra’s journey as a global digital transformation leader for over a decade,” Gurnani said. “Although Vineet has decided to retire, he will continue to be our guiding force.”
He added, “I would also like to welcome on board our new Chief People Officer Harshvendra Soin.”