Tech Mahindra profit dips 3.6%

Against the past quarter, revenue rose about three per cent. In dollar terms year-on-year, it grew about four per cent

Information technology (IT) services provider Tech Mahindra’s net profit fell 3.6 per cent for the fourth quarter ended March  to Rs 614 crore from Rs 637 crore in the year-ago period. Revenue grew 34 per cent year-on-year to Rs 5,058 crore from Rs 3,767 crore.

The company announced a dividend of Rs 20 a share on Wednesday.

Against the past quarter, revenue rose about three per cent and in dollar terms year-on-year, it grew about four per cent. Tech Mahindra, the country’s fifth largest IT services company after acquiring scam-hit Satyam, is expanding in Europe and North America. A little over three-fourths of its revenue comes from these regions.

The consolidated revenue for the quarter includes earnings from Satyam Computers, which merged with Tech Mahindra in July last year; the company said it had not obtained audit opinion on the consolidated financials.

Executive Vice-chairman Vineet Nayyar said, “This has been a landmark year for Tech Mahindra, with the creation of an integrated entity through one of the largest mergers in India. Our superior execution capibilities and ability to offer expanded service lines to our customers will aid our growth.” The management is optimistic about improving earnings in 2014-15.

Sector analysts said Tech Mahindra year-on-year performance in the quarter was better than expected, with the drop in margin against the past quarter also lower than the Street’s estimates. During the quarter, the company was hit by pay raises and a weaker rupee against the dollar but the cut in margin was restricted to 200 basis points at 21.2 per cent, said an analyst.