Tech Mahindra net zooms

BS 200 scorecard

Tech Mahindra, IT solutions and services provider to the telecommunications industry, posted a consolidated net profit of Rs 166.8 crore in the third quarter ended December 31, 2006, an increase of 122 per cent over Rs 75.10 crore net profit in the same period last year.

The company's total revenues during the period under review rose to Rs 769.8 crore, an increase of 131 per cent over Rs 332.6 crore recorded in the same period a year ago.

The sequential rise in the company's net profit was 16.5 per cent from the last quarter's figure of Rs 143.1 crore and revenue growth was 10.3 per cent higher as compared with the last quarter's figure of Rs 697.6 crore.

"We gathered tailwind during the quarter and saw an increase in the number of customers. Tech Mahindra continues to drive along a high-growth path and we are scaling up our services portfolio and global delivery capability to implement our growth strategy and create value for our customers," said Vineet Nayyar, vice-chairman and managing director of Tech Mahindra.

The company's total number of clients rose to 78 from 70, while the number of clients with whom Tech Mahindra does annual business of above $1 million rose from 17 to 22 in the current quarter.

The company, however, did not see any rise in the number of clients who contribute more than $5 million in revenues. The company derived 19 per cent of its revenues from North America, 73 per cent from Europe and 8 per cent from the rest of the world.

In the December 2006 quarter, Tech Mahindra bagged a major five-year contract from British Telecom (BT), under which the Indian company will provide strategic sourcing services to the global communications solutions and services provider.

The financial terms of the deal were not disclosed, even though Tech Mahindra said it expected revenues of over $1 billion over this period. BT's contribution to the total revenues came down to 65 per cent from 80 per cent last quarter.

The company's offshore activities contributed to 60 per cent of the company's total revenues. The top-10 clients continue to contribute 90 per cent to the total revenues.

The company's total headcount rose to 17,774 from the previous quarter's 15,080 and it was 12,366 during the first quarter of the previous financial year. The company's attrition rate, which was a high 22 per cent in the previous quarter, however, is a cause for concern.

To buy out iPolicy Networks

Tech Mahindra has entered into an agreement to acquire 100 per cent equity of iPolicy Networks India, a wholly owned subsidiary of iPolicy Inc, Delaware, USA.