Tech Mahindra today reported third quarter results beating street expectations on almost all count. Net profit fell nearly 7 percent quarter-on-quarter to Rs 275.8 crore but beat analysts' estimates.
Consolidated income from operations increased nearly 10 percent to Rs 1,791 crore.
Tech Mahindra reported a foreign exchange gain of around Rs 12 crore in the December quarter as against loss of Rs 69.53 crore in September quarter, reports Kritika Saxena of CNBC-TV18.
Vineet Nayyar, VC, Tech Mahindra, Sonjoy Anand, CFO, Tech Mahindra and CP Gurnani, COO, Mahindra Satyam talk about the results and the way ahead for the company.
Vineet Nayyar, VC, Tech Mahindra, says that there is a turnaround in the US. They have taken fairly deep rooted fiscal measures and reforms. The fiscal cliff at least for the time being has disappeared. They have recognised that fairly significant investment needs to be made in infrastructure and other parts of the economy. So, there will be generation of demand. One will see an up tick in the US economy. Europe is different. The challenges there continue, the issue of euro has not disappeared; the economies are disparate and at different levels of growth and a uniform currency is putting strain on large number of those countries. Nonetheless, they have recognised that their systems as they exist may have to be changed or tweaked marginally. Therefore, they are looking at seeking help in reducing or optimising costs and that is where we become relevant and we are hoping to make an intervention which will be good for the clients but equally good for the company.
Below is the edited transcript of his interview to CNBC-TV18.
Q: While there is concern in the global economy you are fairly bullish about deal pipeline up tick being seen in the macro environment?
Nayyar: Bullish may be bit of push, but I am optimistic.
Q: Margins have performed well for the quarter, much above expectations and volumes. Are margins sustainable at these levels and what really were the driving factors because there were cost pressures and considering it was a seasonally weak quarter and how were you able to maintain that?
Anand: Focus on low performing projects accounts and improvement in utilisation by 2 percent helped to marginally improve our EBITDA margins.
Q: What is the timeline when we can see both the companies present their consolidated statements?
Nayyar: As soon as the merger happens. It will be with retrospective effect. It will be as of April 1, 2012. Therefore, there will be a consolidated statement. We have reached the penultimate stage. The boards have agreed, the annual general meeting (AGMs) have approved the merger. The Maharashtra High Court too has approved it. It is now pending before the Andhra Pradesh High Court and it is going to come up for hearing in two or three weeks time. Hopefully then or a little later the merger will happen. It is a decision for the High Court to take.
Q: The case of minority shareholders asking for a reopening of swap ratio is obviously under contention. Will you be considering it?
Gurnani: It doesn't make sense at all to go through the whole process. The point is, the who's who of consulting, banking industry, if they are the ones who have gone through and given this stamp of approval and on the basis of that certification Maharashtra government has already given a stamp of approval, I don't think we will ever open this discussion. The AGM too has already given a stamp of approval.