Tech Mahindra Q4 net profit slips 8.4% to Rs 1,126.6 cr due to currency appreciation; announces dividend of Rs 14 per share

Mumbai: IT major Tech Mahindra on Tuesday posted an 8.4 percent decline in consolidated net profit to Rs 1,126.6 crore for the quarter ended 31 March 2019, due to currency appreciation and prudent provisioning for some of the customers.

Its net profit stood at Rs 1,230.8 crore in the corresponding period a year ago.

However, the city-based company saw its consolidated revenue from operations increasing by 10.4 percent to Rs 8,892.3 crore as against Rs 8,054.5 crore in the year-ago quarter, the company said.

For the full fiscal, the net profit was up 13.2 percent to Rs 4,288.8 crore, while revenue from operations was higher by 12.9 percent to Rs 34,742.1 crore as compared to FY2017-18.

"We are overall pleased with the performance. Last time we had mentioned that focus would be on operating efficiencies, digital revenue, making sure that the communications engine starts firing. I think we have done very well on all the three counts.

"Our EBITDA margin has shown a significant improvement. Our digital revenue is all time high and communication group has now delivered extremely good performance," Tech Mahindra Managing Director and Chief Executive Officer C P Gurnani told reporters here.

"We will be pressing the pedal on more operating efficiency gains, growth in both the sectors—enterprise and communication. In dollar terms he noted the revenue for the year was close to $5 billion, at $4.97 billion, a growth of 5.8 percent in constant currency terms," he said.

 Tech Mahindra Q4 net profit slips 8.4% to Rs 1,126.6 cr due to currency appreciation; announces dividend of Rs 14 per share

Representative image. Reuters

The manufacturing vertical has crossed a billion dollar in revenue, grown 10 percent annually, the second vertical for the company which has crossed revenues in excess of a billion dollar after communications.

The communications business grew 4.5 percent quarter on quarter and there is good momentum in the business, Gurnani noted, compensating for the enterprise business that has shown a de-growth of 2.2 percent quarter on quarter.

"There has been a slowdown mainly because of the projects being deferred and some of the projects that have got closed. The business which has done well are some of the government initiatives, defence initiatives, digital initiatives and initiatives in 5G enterprise, blockchain, cybersecurity and engineering services," Gurnani said.

"I was targeting 8-10 percent (growth) and I think we should have done a little better. The timing didn't work out, one quarter here or there slipped off. I am not disheartened at all...but we will be trying much harder to look at growth vector and execution efficiency vector," he added.

The free cash flow for FY2018-19 was at Rs 3,708 crore.

The total headcount of the company stood at 1,21,082 people at the end of March 2019 quarter, an addition of 8,275 persons annually.

The attrition reduced by 2 percentage points in the last quarter at 19 percent.

Its active clients count stood at 938 in the said quarter.

The Board of Directors has recommended a dividend of Rs 14 per share for the financial year ended March 2019, subject to approval by shareholders at the forthcoming annual general meeting on 31 July.

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Updated Date: May 22, 2019 07:46:22 IST