Tech Mahindra has announced its second quarter numbers. It has posted standalone net profit of Rs 180.9 crore for the quarter ended September 2008 as against Rs 171.9 crore.

Vineet Nayyar, Vice-Chairman and Managing Director and CEO, Tech Mahindra said that the company’s revenues have gone up by 4.7% and in terms of earnings by 8.7%.

Sanjay Anand, CFO, Tech Mahindra said that the factors that impacted margins were the rupee appreciation and the substantial numbers of trainees that joined.

Excerpts from CNBC-TV18’s exclusive interview with Vineet Nayyar and Sanjay Anand:

Q: The revenue growth has come at almost 2.3% QoQ. It falls a lot lower than our expectations, which runs at 9% QoQ growth. What exactly happened in this quarter?

Nayyar: If you look in terms of dollars, the growth is close to 4.7% and there is a difference between the dollar number and the rupee number. These results are somewhat consistent with the results you have been seeing from other companies in this quarter.

In terms of dollars, our revenues have gone up by 4.7%, and in terms of earnings, by 8.7%. Obviously, YoY it is 46% in terms of revenues and close to 50% in terms of earnings.

Q: How have the margins been? Our initial calculations show that the margin has been flat on a QoQ basis. You did say that the wage hikes are behind you in Q1. We expected a little bit of traction to come in. Did the rupee hit you and what kind of hedge positions do you have right now?

Anand: The factors impacting margins include the rupee appreciation. We also had a substantial number of trainees joining us from campus. On the positive side, our utilization, excluding trainees has gone up.

Our CNA leverage has been positive and the games on the hedges that we had taken earlier, have been a benefit to us. In terms of forward covers that we have, in the last quarter, we were at about USD 275 million. We have exited this quarter with about USD 700 million of cover.

Last quarter, we re-looked our strategy and decided to take longer-term hedges. We also moved towards hedge accounting. During this quarter, we are carrying forward in terms of mark-to-market aims, in our reserves of USD 17 million.

Q: How is the demand front right now, because we saw a fair bit of consolidation taking place in your vendor levels. Where does that stack up right now?

Nayyar: The demand is consolidating. If I was to move away from the numbers, this quarter has been particularly good for us in terms of new businesses we had closed in on.

We have added about nine additional clients in various geographies. BT and AT&T have been going through a process of consolidation. For AT&T, it was largely because of the acquisitions they have done and BT has also had certain management changes.