Tech Mahindra beats revenue estimates on strong manufacturing growth

Tech Mahindra’s first-quarter revenue beat expectations, with growth in the firm’s manufacturing segment ‌and a weak rupee helping the topline.

Revenue at India’s fifth-largest IT firm rose 17.7% year-on-year to 157.12 billion rupees ($1.63 billion) in ​the three months ended June 30. Analysts, on ​average, expected revenue of 154.76 billion rupees, according ⁠to data compiled by LSEG.

The company received an ​additional lift from the rupee’s roughly 9% depreciation against the dollar ​over the past 12 months, as Indian IT firms typically bill overseas clients in foreign currencies while bearing most of their ​costs in rupees.

The firm reported 28.5% year-on-year rise in ​profit in the quarter at 14.65 billion rupees, missing estimates of ‌15.63 ⁠billion rupees.

The communications division’s revenue, which accounts for a third of the Pune-based company’s total, rose 1.3%, while revenue at its manufacturing division – its second-largest, expanded 17.2% ​year-on-year.

Tech Mahindra’s net ​new order ⁠bookings rose to $1.08 billion from $809 million a year earlier. The firm announced partnerships with ​Telefonica Germany, Microsoft and robotics platform Viam ​during ⁠the quarter.

Last week, larger peers Tata Consultancy Services and HCLTech first-quarter results surpassed street expectations on account of strong tech ⁠spending ​among financial services clients.

Tech Mahindra shares ​closed 1.13% higher ahead of the results. Reuters