Tech Mahindra Q4 net profit almost doubles to Rs 897 cr

Company's revenue grew 13% to Rs 6,884 crore in the reported quarter

Information technology (IT) services companies Tech Mahindra on Tuesday said its consolidated net profit had almost doubled to Rs 897.08 crore for the quarter ended March 2016. The Mumbai-based company had posted a net profit of Rs 472 crore in the corresponding quarter of last financial year. The company’s revenue grew 12.5 per cent to Rs 6,883.73 crore in the reported quarter, from Rs 6,116.79 crore in the January-March quarter of 2015.

Tech Mahindra, which had received in-principle approval from the Reserve Bank of India for setting up a payments bank, said it “will not pursue this opportunity”.

It posted constant currency revenue growth of 1.3 per cent sequentially and 5.5 per cent over the year ago quarter. The numbers were better than Bloomberg consensus estimates which had pegged revenues at Rs 6,835 crore and net profit at Rs 742 crore. In dollar terms, profits were up 77.4 per cent to $134.2 million, while revenues grew 3.9 per cent over a year to $1.02 billion in the reported quarter.

C P Gurnani, managing director and chief executive of Tech Mahindra, said the company was putting a greater focus in areas of digital, automation, verticalisation, innovation and disruption. Its Ebitda margin fell 10 basis points sequentially to 17 per cent in the quarter. “We enter the new financial year on a backdrop of improved business fundamentals,” he added. For the full financial year, net profit was up 18.7 per cent at Rs 3,118 crore, while revenue grew 17.1 per cent to Rs 26,494 crore. Full year Ebitda margin stood at 16.3 per cent, versus 18.5 per cent in FY15. In dollar terms, net profit stood at $474.6 million, while revenue rose 9.5 per cent to $4.03 billion.

“FY16 has been a year where our relentless focus on metrics like yield management and efficiencies has helped us improve our performance in the face of some headwinds. We continue to build competitive advantages in our business operations which will hold us in good stead in these changing markets,” Tech Mahindra Vice-Chairman Vineet Nayyar said.

Total headcount stood at 105,432 as of March 31, with an addition 2,151 professionals during the year.

Cash and cash equivalents stood at Rs 5,189 crore as of March 31, 2016, up by Rs 1,977 crore over a year. Its active client count stood at 807, compared to 767 in 2014-15.

The board proposed a dividend of Rs 6 per share and and additional special dividend of Rs 6 per share for FY16 to commemorate the 10th year of the company's listing on the stock exchanges. The total dividend for FY16 is Rs 12 per share.

With inputs from Sheetal Agarwal