Moneycontrol Bureau
Tech Mahindra, one of the largest IT companies in India, said consolidated profit declined 9.5 percent quarter-on-quarter to Rs 796.5 crore in April-June quarter. The bottomline, which was impacted by lower operational income and higher tax cost, beat analysts' expectations due to higher other income while revenue was in-line.
"We look forward to continuing journey of improving the profitability of business," Vineet Nayyar, vice chairman said.
Revenue grew by 0.5 percent quarter-on-quarter to Rs 6,921 crore and dollar revenue rose 0.87 percent to USD 1,031.5 million in the quarter gone by.
Profit was estimated at Rs 717 crore on revenue of Rs 6,903 crore for the quarter; and dollar revenue at USD 1,028.5 million, according to average of estimates of analysts polled by CNBC-TV18.
Other income surged 53.3 percent to Rs 245.80 crore while tax expenses jumped 36.6 percent to Rs 246.8 crore compared with preceding period.
Operational performance fell short of expectations. Earnings before interest and tax fell 11.4 percent to Rs 827.3 crore and margin contracted by 161 basis points to 11.95 percent on sequential basis, impacted by visa cost. Analysts had estimated operating profit at Rs 911 crore and margin at 13.2 percent for the quarter.
"Margin impacted by cyclical nature of units earnings and visa cost," Vineet Nayyar said, who expects to see uncertainty over next 1 year due to Brexit.
He said earnings of Bio Agency, which acquired in June 2016, will be incorporated in Q2FY17.
The company added 1,784 professionals during the quarter, taking the total headcount to 1.07 lakh while the active client count stood at 818 in Q1FY17 that increased from 807 in Q4FY16.
Clients under USD 20 million category increased by 2 to 42, USD 10 million category rose by 1 to 64 and USD 5 million category by 8 to 120.
Attrition in its IT business (last twelve months) remained at 21 percent on sequential basis.
Tech Mahindra said contribution from top five clients to revenue increased to 28.8 percent from 27.9 percent, top 10 clients' to 40 percent from 39 percent and top 20 clients' to 52.6 percent from 51.9 percent on QoQ basis.
The stock closed at Rs 489.70, up 0.62 percent ahead of quarterly earnings that announced after market hours.
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