Tech Mahindra slips on weak quarterly numbers

Tech Mahindra has dipped 4% after reporting a net profit of Rs 631 crore in the June quarter, a drop of 8.1% from the same period a year before.

Tech Mahindra has dipped 4% to Rs 2066 on the BSE after the company reported a net profit of Rs 631 crore in the June quarter, a drop of 8.1% from the same period a year before.

 

Total expenses rose 30% over a year to Rs 4,342 crore, impacting the company’s operating profit negatively on a sequential basis.

 

The Pune-based company said increase in expenses, primarily because of a rise in visa costs and those associated with the transitioning of large deals, impacted the net profit. Consolidated revenue stood at Rs 5,122 crore, up 25% over a year.

 

On the hiring front, the company said it has added 3288 professionals during the quarter which pushed up the expenses.The attrition stood at 16% up by 100 basis points as compared to the previous quarter.

 

Operating profit was Rs 779 crore, down from Rs 928 crore in the preceding quarter and Rs 747 crore in the corresponding period last year. “One-time visa costs, rupee appreciation, hiring and large projects having had transition costs have impacted the operating profit on sequential basis,” said Vineet Nair executive vice-chairman.

 

As on June 30, the company has a debt of Rs 86 crore and has repaid debt of Rs 277 crore in the quarter gone by. "We have a healthy cash position of Rs 3,669 crore though there is some debt that we need to repay," Nair said.

 

Going ahead we will continue to focus on maintaining growth, and though the telecom customers remain a bit cautious we are patient. The enterprise segment showed healthy performance and we also grabbed some small contracts in the digital space in the quarter, Nair added.

 

Shares of Tech Mahindra opened at Rs 2044, touched a high of Rs 2092 and a low of Rs 2026 on the BSE. A total of 33,753 shraes have been exchanged on the BSE so far.