Q4 Results: Tech Mahindra’s Profit Misses Estimates; Margin Slips

Tech Mahindra Ltd.’s quarterly profit fell for the January-March period, falling short of analyst expectations.

Net profit declined 6.6 percent quarter-on-quarter to Rs 1,127 crore for the fourth quarter, the company said in an exchange filing today. That compares with the Bloomberg consensus estimate of Rs 1,174 crore.

Revenue slipped marginally by 0.6 percent on a sequential basis to Rs 8,892 crore during the three-month period. That compares with the Rs 9,036 crore forecast. However, revenue in dollar terms rose 0.6 percent from the last quarter to $1,268 million.

The software exporter’s operating margin, or earnings before interest and tax, fell 5 percent quarter-on-quarter to Rs 1,368 crore. The operating margin contracted 70 basis points to 15.4 percent. The company declared a final dividend of Rs 14 per share.

“Enterprise business showed a de-growth of 2.5 percent sequentially,” the information technology company’s Managing Director and Chief Executive Officer CP Gurnani said in a press conference after the earnings announcement. “There has been a slowdown [in the enterprise business] mainly because some of the projects have been deferred and some got closed.”

The country's fifth largest IT services company repurchased as much as Rs 1,956 crore worth of its shares in March this year.

Shares of Tech Mahindra declined 1.4 percent in today’s trade ahead of the earnings announcement compared to a 1 percent fall in the Nifty Index.