Tech Mahindra Q4 PAT tumbles 30% QoQ to Rs 804 cr

On a consolidated basis, Tech Mahindra's profit after tax (PAT) fell 29.9% to Rs 804 crore on 1.7% decline in revenue to Rs 9,490 crore in Q4 March 2020 over Q3 December 2019.

EBITDA fell 13.8% to Rs 1,348 crore in Q4 March 2020 over Q3 December 2019. EBITDA margins fell 200 bps to 14.2% in Q4 March 2020 over Q3 December 2019.

In dollar terms, the company's revenue came in at $1,294.60 million in the January-March period, down 4.3% on a sequential basis. Digital revenues grew 2% quarter-on-quarter and accounted for 44% of total revenues.

The IT firm's consolidated PAT fell 6.2% to Rs 4033 crore despite a 6.1% rise in revenue to Rs 36,868 crore in the year ended on 31 March 2020 (FY20) over the year ended on 31 March 2019 (FY19). EBITDA contracted 9.6% to Rs 5726 crore during the year. EBITDA margin slipped 270 bps to 15.5% in FY20 over FY19. The board has proposed a final dividend of Rs 5 per share.

CP Gurnani, managing director & chief executive officer, Tech Mahindra, said, COVID-19 has brought an unprecedented change in business model for the IT industry. While the demand traction seen through the first three quarters of fiscal 19-20 has reversed in Q4, we expect that the focus on digital transformation, remote working, and network modernization will recover in the medium term. The company has shown a strong growth for fiscal 20 and we remain committed to deliver sustainable solutions to our customers enabling them to adopt to new normal.

Manoj Bhat, chief financial officer, Tech Mahindra, said, Q4 has been a quarter where some of our metrics were impacted by the environmental challenges. Efficient operations, cost optimization and delivery automation will be the key focus areas going into the next year. Our strong balance-sheet combined with a focus on cash conservation will help us tide over the volatility in near term, as we look to emerge stronger and leaner to capture opportunities ahead.

Total headcount stood at 1,25,236, up 4,154 YoY. The company's cash and cash equivalent stood at $1,164 million as of 31 March 2020.

Tech Mahindra is engaged in the business of computer programming, consultancy and related services. The firm's segments include information technology (IT) services and business processing outsourcing (BPO). The company operates in various sectors, including telecom business and enterprise solutions business.

Shares of Tech Mahindra rose 3.26% to end at Rs 546.10 on Friday (30 April 2020).

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