Tech Mahindra profit jumps 25% in Q4, beats St estimates

Mumbai: India’s sixth largest software exporter Tech Mahindra reported a healthy 24.7 percent jump in net profit at Rs 377.2 crore in the fourth quarter ended March 31, helped by favourable currency movement and

focus on operating matrix. Net profit stood at Rs 302.5 crore in the January-

March 2012 quarter.

[caption id=“attachment_804197” align=“alignleft” width=“380”] Reuters[/caption]

“Focus on operating matrix and some currency fluctuations have helped the company post good profit. We have seen 9.2 percent growth in dollar terms. The growth is in line with our strategy of broad-based revenue,” Tech Mahindra

Managing Director C P Gurnani told reporters here.

The software firm has received a number of managed services deals, which allowed deal pipeline to remain healthy. Its active client count stood at 151 in FY'13 as against 130 in FY'12, he said.

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The company, part of the $15.9 billion diversified Mahindra Group, posted an increase of 34 percent in consolidated income at Rs 1,907.2 crore in the reported quarter as against Rs 1,419 crore in the year-ago period.

“We have delivered profitable growth for FY13, with significant margin improvement. We expect to see growth in the quarters ahead. This confidence is based on the strong demand that we see for telephony and data services globally,” Tech Mahindra Executive V-P Vineet Nayyar said.

Given its deep domain expertise in the telecom sector, the company will be able to leverage its leadership position, he added. “Tech Mahindra reported better-than-expected revenue growth for Q4 FY'13,” Angel Broking Research Analyst (IT and Telecom) Ankita Somani said.

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For the year ended March 2013, the IT firm’s net profit grew 17.6 per cent to Rs 1,287.8 crore, while revenue from services was up 25.2 per cent to Rs 6,873.1 crore.

For the quarter under review, North America contributed 29 percent of the revenue, while Europe and the Rest of the World accounted for 43 per cent and 27 percent.

“The US, I think, is on the path of economic recovery - demand is growing and we are also seeing some expansion in discretionary spends. We have done well in Asia, Africa and the Middle East. Europe continues to have issues but there is a greater sense of stability,” Nayyar maintained. Growth in Europe is going to be “low and patchy”, he added.

PTI