Tech Mahindra Q2 net profit drops 5% YoY to Rs 1,065 crore

The company's board has also proposed a special dividend of Rs 15 per equity share of Rs 5 each.

Tech Mahindra on Friday reported a 5.27 per cent year-on-year (YoY) decline in its consolidated net profit at Rs 1,064.6 crore for the quarter ended September 2020 (Q2FY21). The IT services company had posted a profit of Rs 1,123.9 crore in the year-ago period.

On a sequential basis, the numbers grew 9.49 per cent.

The company's revenue for the quarter came in at Rs 9,371.8 crore, up 3.3 per cent YoY and 2.9 per cent QoQ. In US dollar terms, revenue stood at $1,265.4 million, up 4.8 per cent QoQ and down 1.7 per cent YoY. In constant currency, revenue grew 2.9 per cent QoQ.

The company also declared a special dividend of Rs 15 per equity share of Rs 5 each. The dividend shall be paid on Thursday, November, 12, 2020 while November 2, 2020 has been fixed as the record date for the same.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at Rs 1,703 crore, up 30.9 per cent QoQ and 13.4 per cent QoQ while EBITDA margin stood at 18.2 per cent, up 390bps QoQ.

Analysts at Edelweiss Securities had expected Tech Mahindra to post revenue growth of 2.3 per cent QoQ in constant currency terms and 3.7 per cent in US dollar terms at $1,253 million. On a year-on-year (YoY) basis, however, US dollar revenue was estimated to fall by 2.7 per cent. In rupee terms, revenue was seen at Rs 9,306.9 crore, up 2.2 per cent QoQ and 2.6 per cent YoY. CLICK HERE TO READ WHAT ANALYSTS HAD EXPECTED 

"Our Repair, Rally and Rise strategy has helped the company to emerge stronger, as we journey towards a post Covid world. We are witnessing demand revival across multiple segments, as customers have accelerated their pace of digital transformation. Our focus on creating Human Centered Experiences will enable us to capture increased spends on consumerisation, as businesses try to stay relevant in the current environment," said CP Gurnani, Managing Director & Chief Executive Officer. 

The company won new deals worth $421 million during the period.

Acquisitions

Tech Mahindra announced the strategic acquisition of Momenton, a digital enterprise technology firm, offering consultancy and implementation services, and Tenzing Limited, a technology consulting company. Tech Mahindra has acquired 100 per cent equity in both the organisations, the press release added.