Tech Mahindra Q1 Results: Profit Rises 25%, Margin Contracts

Tech Mahindra Ltd.’s quarterly profit rose, beating estimates, aided by deal wins.

The information technology company's net profit rose 25% sequentially to Rs 1,353.2 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 1,216.2-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue in U.S. dollar terms increased 4.1% over the preceding three months to $1,383.6 million. Analysts had pegged the metric at $1,351.15 million.

• Revenue in rupee terms rose 5% to Rs 10,197.6 crore—higher than the Rs 10,072.7-crore estimate.

• Earnings before interest and tax remained flat at Rs 1,545.3 crore. Analysts were expecting Rs 1,457.6 crore.

• EBIT margin contracted to 15.2% from 16% in the preceding quarter, as the company rolled out wage hikes. The consensus estimate was 14.5%.

• Cash and cash equivalents stood at $1,818.2 million.

"Witnessed an all-rounded performance this quarter with growth across our key markets and industry sectors," CP Gurnani, managing director and chief executive officer at Tech Mahindra, was quoted as saying in the filing. “Continue to see strong traction in large deal wins as we're helping our customers in integrated digital transformation.”

Tech Mahindra’s peers Infosys Ltd., Wipro Ltd. and HCL Technologies Ltd., too, saw their net profit rise in the quarter ended June except for Tata Consultancy Services Ltd. whose profit dropped 2.5%. Revenues of all companies, however, rose.

Shares of Tech Mahindra closed 0.75% higher before the earnings were announced, compared with a 0.44% rise in the benchmark Nifty 50 index.