Tech Mahindra Q3 net down 20% at Rs 805 cr y-o-y

However, quarterly profit up 17% at Rs 5,751 crCompany declares bonus issue and stock split

IT services firm Tech Mahindra on Friday posted net profit of Rs 805.3 crore for the quarter ended December 31, 2014, down 20.2 per cent from Rs 1009.9 crore in the corresponding quarter last financial year.

Revenue for the quarter was up 17.4 per cent at Rs 5,751.70 crore, from Rs 4,898.55 crore in the year-ago period.

The profit for the quarter under review includes special adjustment of Rs 28.5 crore from Mahindra Engineering Services (MES) and hence are not comparable. The company stated that the third quarter of FY14 had a write-back of excess provision for contingencies provided for in earlier years.

“Despite seasonal weakness of the third quarter and currency volatility, Tech Mahindra turned in a fairly robust performance. Our continued focus on operational excellence is yielding tangible results for our stakeholders,” Tech Mahindra Executive vice-chairman Vineet Nayyar said.

In dollar terms, revenue grew 2.7 per cent to $924 million on sequential basis. On constant currency basis revenue was up 4.9 per cent.

"We believe our service portfolio coupled with the tuck-in acquisitions like MES have augmented our growth aspirations well, this quarter," Tech Mahindra Managing Director and CEO CP Gurnani said.

Tech Mahindra will make greater investments into digital transformation and ride the wave of opportunities that spot the business landscape today, he added.

The company added 2,700 professionals during the quarter, taking the total headcount to 98,009. The software headcount stood at 67,592, while the number of BPO employees was 23,566.

At the end of December 31, 2014, Tech Mahindra had Rs 4,214 crore in cash and cash equivalents. Its active client count stood at 674 in the third quarter of the ongoing fiscal from 649 in the preceding quarter.

Company declares bonus issue and stock split

The board has also approved issue of bonus shares at 1:1 and sub-division of its equity shares in the ratio of 2:1 (ie two equity shares of Rs 5 each fully paid up for every one equity share of Rs 10 each fully paid up).