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Tech Mahindra Q4 profit falls 17.4% to Rs 1,081.4 crore, revenue grows at 0.9%

Tech Mahindra announced an interim and special dividend of Rs 15 per share each, which will be paid by August 11, 2021.

April 27, 2021 / 11:13 PM IST

Software services company Tech Mahindra on April 26 has reported a 17.4 percent sequential decline in consolidated profit at Rs 1,081.4 crore for the quarter ended March 2021. The profit in the previous quarter was at Rs 1,309.8 crore.

Consolidated revenue for the quarter at Rs 9,729.9 crore grew by 0.9 per cent over Rs 9,647.1 crore in December quarter.

The numbers missed analysts' expectations as profit was estimated at Rs 1,313 crore on revenue of Rs 9,830 crore for the quarter, according to an average of a CNBC-TV18 analysts poll.

IT services business registered a 1 percent sequential growth in revenue at Rs 8,673 crore but the BPO segment revenue was almost flat at Rs 1,056.9 crore in Q4FY21 against Rs 1,056.6 crore in the previous quarter.

Revenue in dollar terms grew by 1.6 percent sequentially to $1,329.6 million and the revenue growth stood at 0.7 percent QoQ in constant currency terms, which missed CNBC-TV18 poll estimates of 2.7 percent and 2 percent, respectively.

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"Our continued focus on cutting-edge technologies has expanded client engagement with large deal wins this quarter. We are witnessing a strong demand acceleration and are committed towards delivering a next-level human-centered experience of the future. The health and wellness of our associates and community, at large, continues to be our prime focus, as we navigate through this pandemic together," said CP Gurnani, Managing Director & Chief Executive Officer.

New deal wins were robust at $1.04 billion for the March quarter 2021, much higher than predicted. Deal wins stood at $455 million in the December quarter.

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At the operating level, earnings before interest and tax (EBIT) at Rs 1,553 crore grew 1 percent QoQ, and margin expanded 10 bps QoQ to 16 percent in Q4FY21, beating CNBC-TV18 poll estimates.

"We have witnessed substantial margin improvement and cash flow generation this year. Our focus on delivery transformation will continue, as we increasingly witness a structural shift towards digital to adapt to the new normal," Chief Financial Officer Milind Kulkarni said.

Communications business registered a 1.4 percent sequential growth in Q4FY21, manufacturing 1.9 percent, and technology, media & entertainment revenue growth at 0.5 percent.

Banking, financial services insurance (BFSI) segment witnessed 4.9 percent quarter-on-quarter growth during the quarter but retail, transport & logistics business revenue was down 3.2 percent QoQ.

Revenue from America declined 1.3 percent sequentially, whereas Europe registered a 2 percent growth and the rest of world 6.2 percent for the quarter.

Tech Mahindra added two clients in the $10-million band and seven in the $5-million bracket, taking the total active clients' list to 1,007.

In the financial year 2020-21, the consolidated profit at Rs 4,428 crore grew by 9.8 percent compared to the previous year and revenue increased 2.7 percent to Rs 37,855 crore YoY but revenue in dollar terms declined 1.4 percent to $5,111.1 million in FY21 YoY.

IT attrition rate increased to 13 percent in March quarter compared to 12 percent in the previous quarter. The total headcount at 1,21,054 was lower by 847 compared to the December quarter.

The company announced an interim and special dividend of Rs 15 a share, which will be paid by August 11, 2021.

Tech Mahindra shares have corrected 2.4 percent in the current calendar year, underperforming the Nifty IT index that has gained 5.6 percent in the same period.

Life Insurance Corporation of India raised its stake in Tech Mahindra to 2.64 percent at the end of March 2021, from 2.03 percent as of December 2020.

Mutual Funds also increased shareholding to 8.72 percent from 8.39 percent, but foreign portfolio investors reduced their stake to 38.31 percent from 39.04 percent in the same period.
Moneycontrol News
first published: Apr 26, 2021 04:01 pm
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