Telecom solutions company Tech Mahindra has reported a 60 per cent rise in net profit for the second quarter ended September 30, largely due to profits reported by sister company Mahindra Satyam and foreign exchange gains.

The Pune-headquartered company's net profit for the quarter stood at Rs 240.4 crore as against Rs 276.5 crore reported in the same quarter in the past financial year.

Though there has not been a revival in discretionary spending by clients in the telecom business, Tech Mahindra has been able to capitalise on cost-optimisation opportunities presented by the current operating environment, Mr Vineet Nayyar, Vice-Chairman, Managing Director and Chief Executive Officer of the company, told newspersons on Tuesday.

Mahindra Satyam achieved a net profit of Rs 238 crore in the second quarter ended September 30, showing a growth of 5.7 per cent quarter-on-quarter. Tech Mahindra has picked up a profit of Rs 101.6 crore by virtue of the 42.65 per cent stake it holds in the Hyderabad-based company.

Tech Mahindra reported a 111.3 per cent rise in other income to Rs 97.2 crore (Rs 46 crore) largely due to forex gains, Mr Sonjoy Anand, Chief Financial Officer of the company, said.

Tech Mahindra had in the last quarter said there could be an erosion in business from top customer BT Group owing to ‘significant portions' of services — where the IT company is a service provider — being re-tendered.

Commenting on it Mr Nayyar said: “A large portion of our estate was put up for re-tendering. But we have managed to retain our estate…though our quarterly revenues from BT may come down, we hope to re-adjust our delivery capabilities to manage the downward pressure.”

BT's contribution to overall revenues came down to 37 per cent from 40 per cent in the June quarter.

The Tech Mahindra scrip was up 1.16 per cent to close at Rs 615.70 on the Bombay Stock Exchange on Tuesday.

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