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IT services firm Tech Mahindra’s second quarter consolidated net profit grew 29.7 per cent year-on-year to ₹836 crore from ₹644.73 crore in the July-September quarter last year, backed by improvement in operational performance.
The company’s revenue from operations was up 6.1 per cent at ₹7,606.38 crore during the quarter as compared with ₹ 7,167.41 crore in the same period last year. In dollar terms, the net profit was up nearly 34 per cent to $129.3 million, while revenue was up 10 per cent to $1.17 billion in the second quarter.
“We took a serious look at our dipping EBITDA and have made significant changes in the ways we run the company. We are on the right path in terms of growth and profitability,” said Tech Mahindra Vice-Chairman Vineet Nayyar.
Tech Mahindra has been able to improve on its dipping EBITDA margins in the last two quarters, taking it back to where it was a year ago at 14.5 per cent. However, CEO and MD CP Gurnani acknowledged that current margin levels are still not impressive and there is room for improvement.
Aggressive on new tech The company is getting aggressive on new age technologies and has trained 11,000 employees on automation technologies. It also plans to train additional 10,000 people in areas such as artificial intelligence, machine learning and automation.
In the said quarter, Tech Mahindra added 21 active clients, taking its overall active client base to 885.
The company added 7 clients under $10 million category, 8 in $5 million band and 13 in $1 million band.
Attrition rate down Attrition rate (LTM) for the quarter declined to 16 per cent from 17 per cent in previous quarter, it added. Tech Mahindra added 1,250 employees in the quarter.
IT utilisation in the second quarter improved to 81 per cent from 77 per cent on sequential basis while IT utilisation (excluding trainees) was unchanged at 81 per cent quarter on quarter.
Tech Mahindra’s cash and cash equivalents stood at ₹5,961 crore as of September 2017. “With our DAVID (digitalisation, automation, verticalisation, innovation, disruption) strategy at play, we have posted reasonably good growth in the quarter across revenue, profit and new business,” Gurnani said.
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