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Last Updated : Nov 03, 2015 07:16 PM IST | Source:

Tech Mahindra Q2 net up 16% on other income, $ rev rises 2%

Revenue rose 5.1 percent to Rs 6,615.5 crore from Rs 6,293.8 crore in same period. Dollar revenue increased 2.1 percent to USD 1,011 billion.

Moneycontrol Bureau

IT services provider Tech Mahindra's July-September quarter profit increased 16.2 percent sequentially to Rs 785.6 crore, driven mainly by other income and operational performance.

Rupee revenue increased 5.1 percent to Rs 6,615.5 crore and dollar revenue rose 2.2 percent to USD 1,011 million on sequential basis. Dollar revenue growth in constant currency was 3 percent.


Profit and rupee revenue were higher than analysts' expectations that were at Rs 732 crore and Rs 6,578 crore for the quarter, according to analysts polled by CNBC-TV18. Dollar revenue growth was in line with estimates but constant currency growth was ahead of estimates of 2.7-2.8 percent.

Mahindra and Mahindra group company has reported an other income of Rs 165.8 crore during the quarter, higher by 21.5 percent over Rs 136.6 crore in preceding quarter, including Rs 31.85 crore write back of excess provision made for contingencies provided earlier.

Foreign exchange loss for the quarter was at Rs 8.8 crore against gain of Rs 93.21 crore in June quarter.

Tech Mahindra says it added 1 client of USD 50 million and 2 clients of USD 10 million. It also added 1 client of USD 5 million and 2 clients of USD 1 million during the quarter. It has 788 active clients at the end of September quarter against 770 clients in June quarter.

Attrition rate for the quarter was at 20 percent, increased compared to 19 percent in previous quarter. Utilisation rate improved sequentially to 77 percent from 74 percent and utilisation rate excluding trainees stood at 79 percent against 75 percent, which supported overall margin.

Consolidated EBIT (earnings before interest and tax) increased 18.6 percent quarter-on-quarter to Rs 903.7 crore and margin expanded 156 basis points to 13.66 percent in quarter gone by.

Tax expenses for the quarter jumped 24 percent to Rs 260.5 crore compared to preceding quarter.

Tech Mahindra says cash & cash equivalent increased 4.3 percent quarter-on-quarter to Rs 3,349.6 crore and borrowings rose 6.8 percent to Rs 799.6 crore in Q2FY16.

Ravi Menon of Elara Capital says recovery in margin is a positive for the company, despite lower-than-expected EBIT and dollar revenue numbers. Revenue is still tepid, so no positive response expected from the stock, he feels.

However, Sarabjit Kour Nangra, VP Research of Angel Broking says earning numbers certainly were better than street expectations.

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First Published on Nov 3, 2015 03:48 pm
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