IT firm Tech Mahindra on Tuesday posted 5.6 percent increase in consolidated net profit at Rs 1,124 crore for the quarter ended September 30 compared with Rs 1,064 crore in the corresponding period last year.
Tech Mahindra also announced that it will acquire US-based Born Group at an enterprise value of $95 million (approximately Rs. 671 crore).
Revenues from operations grew 5.1 percent to Rs9,070 crore in the quarter under review from ₹8,629.8 crore in the year-ago period.
In dollar terms, profits for the quarter were at $158.6 million, while revenue was $1.28 billion during the quarter under review.
“We are thankful to our customers for believing in our capabilities despite a tough demand environment. Our consistent large deal wine is a testimony of our differentiation in the marketplace. Digital continues to be a strong growth driver as we help our customers in their transformation journey,” Tech Mahindra Managing Director and CEO CP Gurnani said.
Gurnani remained bullish on the growht outlook for both communications as well as enterprise business.
“We continue to focus on margin improvement, while transitioning some of the large deals in a volatile macro economic environment,” Tech Mahindra Chief Financial Officer Manoj Bhat said.
Tech Mahindra signed a multi-year agreement with AT&T during the quarter, to expand the telecom firm’s strategic collaboration, shared services modernisation and movement to the cloud.
Tech Mahindra also announced that its board has approved the acquisition US-based Born Group through its wholly owned subsidiary – Tech Mahindra (Singapore) Pte Ltd. “The enterprise value is USD 95 million. USD 25 million will be paid out linked to achievement of financial targets for the financial year ending December 31, 2019,” Tech Mahindra said in a regulatory filing. The cash transaction is expected to close by November 15, 2019.
Born Group is the largest independent, integrated agency for strategy, creative content and commerce offerings with strong technology capabilities with offices in London, Singapore, Hong Kong and India, and has over 1,100 employees. The acquisition mimics similar investments from IT services players like Infosys, HCL and Wipro at a time when digital skills are becoming a key to growth for IT services firms.
“The acquisition will enhance Tech Mahindra’s transformation consulting capabilities through addition of creative and design skills, technology and analytics platforms and commerce expertise,” Tech Mahindra said.
Incorporated in 2014, Born’s turnover was $50 million in 2018.―The Hindu Business Line