Tech Mahindra Q1: Net profit falls 16% to ₹1,132 cr

Net profit of software services firm Tech Mahindra dropped 16.4% year-on-year to ₹1,132 crore in the first quarter of the financial year 2022-23 from ₹1,353.20 crore in the year-ago period.

Revenue of the IT services company, however, jumped 24.6% to ₹12,708 crore compared with ₹10,197.60 crore in the corresponding quarter last year, according to its exchange filing. Dollar revenue for the quarter stood at $1,632 million, up 18% year-on-year. In constant currency terms, revenue growth stood at 3.5% quarter-on-quarter (QoQ).

Tech Mahindra's EBITDA, or earnings before interest, taxes, depreciation and amortisation, during the quarter stood at ₹1,880 crore, up 0.2% compared to the year-ago period.

The company's attrition rate during the quarter on the last twelve-month basis fell to 22% from 24% in the March quarter but remained higher than 17% in the year-ago quarter.

The number of clients in the $50 million-plus bracket was at 23, the same as the January-March quarter. Clients in the $20 million-plus bracket jumped to 60 from 54 sequentially, and in the $10 million-plus bracket to 104 from 97.

At the end of the first quarter, the headcount of software professionals rose 26% year-on-year to 88,030. Headcount of BPO professionals jumped 23.6% to 61,392.

Net new deal wins for the quarter stood at $802 million, which was less than the January-March quarter's $1,011 million and the year-ago quarter's $815 million.

EBIT margin for the quarter came in at 11% compared with 13.2% in the previous quarter and 15.2% in the year-ago quarter.

"We are starting this fiscal with a renewed commitment towards delivering consistent organic growth. We remain resilient and watchful given the dynamic global macro-economic environment and will continue to invest in new and emerging technologies to deliver differentiated offerings," says C.P. Gurnani, managing director and chief executive officer, Tech Mahindra.

"Our winning strategy rests on the pillars — 'Purpose, People and Performance', which is aiding us to responsibly capitalise on the strong demand environment in the market," he adds.

Tech Mahindra says it has over 1.58 lakh professionals across 90 countries helping 1,262 global customers.

"Delivery transformation, cost optimisation and cash conversion will be key focus areas, as we continue to offset the strong supply side headwinds in the market. We aim to expand our profitability through operational excellence and improved operating metrics over the course of FY23," says Rohit Anand, chief financial officer, Tech Mahindra.