Moneycontrol Bureau
Country's fifth largest software services provider Tech Mahindra reported 38 percent sequential growth in third quarter (October-December) net profit on account of exceptional gains of Rs 346.6 crore.
Net profit increased to Rs 1,001 crore from Rs 718.4 crore including exceptional gains. After excluding that, net profit stood at Rs 663.22 crore for the quarter.
The company reported an exceptional gain of Rs 120 crore. "It represents write back during the quarter of the estimated excess provision for contingencies provided in an earlier year by erstwhile Satyam," the company elaborated in its statement. Mahindra Satyam was merged with Tech Mahindra in July 2013.
It has a tax writeback of Rs 226.6 crore during the quarter. After re-evaluating the effects of the possible outcomes of the tax matters in dispute relating to erstwhile Satyam, the company has written back the excess tax provision in respect of prior years.
Rupee revenues grew 2.7 percent quarter-on-quarter (33.5 percent year-on-year) to Rs 4,900 crore and dollar revenues shot up 4.35 percent (17.2 percent Y-o-Y) to USD 791 million, beating analysts' expectations.
According to CNBC-TV18 poll, analysts had estimated rupee revenues of Rs 4,810 crore and dollar revenues of USD 777.3 million for the quarter.
While addressing press conference, Vineet Nayyar, MD said Tech Mahindra has signed a large deal in Australia in BFSI segment in the quarter. "We will continue to grow through acquisitions," he added.
He further said the company ended Q3 on a fairly optimistic note. "We remain confident of the success of our differentiated offerings."
Nayar sees greenshots in global economy.
There was a miscellaneous income of Rs 95.74 crore during the quarter, a growth of 49.3 percent over previous quarter.
Tech Mahindra reported a foreign exchange loss of Rs 141.44 crore during October-December quarter as against Rs 26.06 crore in previous quarter.
Operating profit margin was unchanged at 23.28 percent compared to previous quarter.
On sequential basis, active clients increased to 605 from 576. Total headcount of the company increased 2,165 to 87,399 as of December 2013. Attrition rate for the quarter was stable at 17 percent.
Cash and cash equivalent for the quarter was Rs 3,459 crore while debt stood at Rs 342 crore in the quarter ended December 2013.
Meanwhile, the board of directors of the company increased the limit of investment by foreign institutional investors from the existing 45 percent to 48 percent of the paid up capital.
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