TechM Q2 net dips 44%

Salary hikes, exchange rate fluctuation, pressure from its largest client, BT, and interest cost incurred due to the acquisition of Satyam Computer Services impacted Mumbai-based Tech Mahindra’s second quarter numbers.

For the quarter ended September 30, net profit dipped 44 per cent to Rs 169 crore from Rs 302 crore in the corresponding quarter of the last financial year. Revenue was down 1.9 per cent at Rs 1,141 crore from Rs 1,164.8 crore in the same quarter last year. Sequentially (compared to the quarter ended June 30), net profit was up 20 per cent from Rs 140.9 crore and revenue up 2.5 per cent from Rs 1,113 crore.

The interest cost on the debt taken for acquiring Mahindra Satyam (erstwhile Satyam Computer Services) for the quarter was $17 million (around Rs 80 crore). The company has been able to refinance its Rs 1,150 crore debt, reducing the effective interest rate on the dent portfolio to 8.7 per cent from 12.7 per cent.