Tech Mahindra Q1 consolidated net profit up 43% to Rs 1,365.7 cr

PTIUpdated: Friday, July 30, 2021, 01:15 AM IST
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The company, whose total income in the quarter improved 7 per cent month-on-month to Rs 10,485 crore, is confident of either maintaining or exceeding the growth during the remaining fiscal year, Managing Director and CEO C P Gurnani told reporters here. |

Tech Mahindra on Thursday reported 42.91 per cent growth in June quarter consolidated net profit at Rs 1,365.7 crore on higher revenue and an expansion in profit margins.

Profit in the year-ago period stood at Rs 955.6 crore.

The company, whose total income in the quarter improved 7 per cent month-on-month to Rs 10,485 crore, is confident of either maintaining or exceeding the growth during the remaining fiscal year, Managing Director and CEO C P Gurnani told reporters here.

Total income grew 10 per cent when compared to the year-ago period.

Profit attributable to the owners of the company was higher 39.2 per cent at Rs 1,353.2 crore from Rs 972.3 crore in the year-ago period.

"We do believe that we should be able to maintain or do better than the trajectory of this quarter for the rest of the year," Gurnani said, adding that large client wins is one of the biggest factors which is making the company confident about the future.

During the quarter, its profit before tax grew 39 per cent to Rs 1,794 crore on the back of an expansion in the operating profit margin to 15.3 per cent.

Chief Financial Officer Milind Kulkarni said the company had given a guidance for maintaining it at 15 per cent, but will be looking at expanding on the same during the year.

Kulkarni added that the overall deal wins came at USD 815 million during the quarter.

Gurnani said the biggest focus for 2021-22 will be on building talent and it is looking to get people in focused areas such as artificial intelligence, internet of things and also space technology, where it is keen to building a leadership.

He said the overall hiring of freshers will be three times that of the normal. The company hired 5,200 people in the quarter to take its overall strength to over 1.26 lakh, and will continue to hire at the same or an accelerated pace in the remaining fiscal year as well, Gurnani said.

He said both the communication, media and entertainment(CME), and enterprise businesses are doing well, reporting healthy growth on a sequential basis.

The quarter saw the signing of one large deal each in the healthcare and business process management space, he added.

Kulkarni said the travel restrictions have led to an increase in sub-contracting of people at onshore locations where clients are located, which has led to an increase in expenses. However, higher income from forex and investments, coupled with lower tax rate have helped the profitability.

The company, which has been active on the merger and acquisitions front, had a cash and cash equivalent of USD 1,818.2 million as of June 30, 2021.

"Tech Mahindra delivered better-than-expected performance across all financial parameters, with healthy deal wins and decent free cash flow generation," analysts at the brokerage Sharekhan said.

The company scrip closed 0.74 per cent up at Rs 1,127.75 on the BSE on Thursday.

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