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| Tech Mahindra Q1 net dips 49% y-o-y |
| BS Reporter / Mumbai Jul 23, 2009, 00:39 IST |
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Interest costs taken on borrowings to fund Satyam Computer Services’ acquisition, pressure from its top client, BT, and forex exchange losses impacted Tech Mahindra’s first quarter results ended June 30.
TM’s consolidated net profit for the first quarter dipped 49 per cent to touch Rs 131.6 crore from Rs 258.5 crore in the corresponding quarter last financial year. Revenue at Rs 1,113 crore was down marginally from Rs 1,116 crore in the same quarter last year.
 Sequentially (as compared to the quarter ended March 31), net profit dipped 42.8 per cent from Rs 230.4 crore, but revenue was up 5.8 per cent, from Rs 1,051 crore.
TM had debt of Rs 2,380.2 crore as of June 30. The total interest cost for the quarter is Rs 57.1 crore as against Rs 2.3 crore in the previous quarter. Other income for the quarter was a negative Rs 26.1 crore against a gain of Rs 7.8 crore in the previous quarter, largely on account of foreign exchange losses.
Meanwhile, concerns about its largest client, BT, continued among the analysts. The management said BT “is under pressure and there is scope for re-negotiation on the long-term contracts with BT.” TM has signed deals worth $2 billion with BT. “Besides the company is not giving any break-up on the revenues they are incurring from BT. There is no clarity on the deals,” said an analyst tracking the company.
The contribution of BT saw a dip of 11 per cent on a year-on-year basis to 52 per cent. Similarly, the top five clients’ contribution went down to 78 per cent from 84 per cent. And the top 10 clients saw a dip of 4 per cent in terms of contribution.
TM now holds 42.7 per cent of the shares in Mahindra Satyam, through its subsidiary, Venturbay. The reported consolidated numbers do not include Mahindra Satyam financials, as those are being prepared for restatement, said the company in a statement.
Anand Mahindra, Chairman of TM, said, “This has been a momentous quarter which has redefined Tech Mahindra’s positioning in the marketplace. Not only has our leadership position in telecom been reinforced, but our presence has expanded across other industry verticals as well.”
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