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| Tech Mahindra net dips 22% |
| BS Reporter / Mumbai Jan 23, 2010, 00:04 IST |
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Tech Mahindra’s net profit for the third quarter ended December 31, 2009, dropped 22.4 per cent to Rs 172.8 crore from Rs 222.8 crore in the corresponding quarter last financial year. The numbers were impacted due to the interest cost on debt taken for the acquisition of Satyam Computer Services, rebranded Mahindra Satyam.
Revenue for the quarter, at Rs 1,127.3 crore, was up 4.8 per cent from Rs 1,132.2 crore in the same quarter last year.
Sequentially (as compared to the quarter ended September 30, 2009), the company’s net profit rose 2.2 per cent from Rs 169 crore. Revenue grew 3.9 per cent, from Rs 1,141.8 crore.
The company was able to reduce its debt position by paying Rs 450 crore. By the end of December, the company’s debt position was Rs 1,700 crore, which it expects to bring down to Rs 1,400 crore in January. Interest expense for the quarter was Rs 45.9 crore.
Tech Mahindra received Rs 968.2 crore from British Telecom (BT) as contract restructuring fees on certain long-term deals. Part of this money, Rs 450 crore, was used to repay the debt it raised to buy a majority stake in Mahindra Satyam.
“On a constant currency, BT revenues have remained flat. Otherwise, they have dipped marginally. The fee we have received is because we have restructured some of the long-term deals with BT. This was done in the last quarter but the payment came in towards the end of December. But, with this, we have committed volumes and have a simplified rate card. So, though the rates are reduced, they are constant,” said Sanjay Kalra, chief executive officer.
In terms of BT, which contributes about $72 million on a quarterly basis, the company feels the pressure is now coming to an end.
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