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Tech Mahindra Q4 results: Net profit falls 26% to Rs 1,118 cr

India’s fifth largest IT services firm’s revenue fell 0.11% over the previous three months to Rs 13,718.20 crore in the quarter ended March 31, according to an exchange filing on Thursday. That compares with the Rs 13,812.94-crore consensus estimate of analysts tracked by Bloomberg.

Tech Mahindra Q4 Results FY23: Key Highlights (QoQ)

  • Revenue down 0.11% at Rs 13,718.20 crore (Estimate: Rs 13,812.94 crore).
  • EBIT declines 19.93% at Rs 1,317.8 crore (Estimate: Rs 1,689.97 crore).
  • EBIT margin at 9.60% vs 11.98% (Estimate: 12.23%).
  • Net profit down 12.47% at Rs 1,125 crore (Estimate: Rs 1,322 crore).

In dollar terms, revenue growth was flat sequentially but grew 0.3% in constant currency terms to $1,668 million. EBIT—a measure of operational profitability—declined 5.7% quarter-on-quarter to $245 million. Net profit declined 13.7% to Rs 136 million.

For the full fiscal, revenue was up 19.4% year-on-year to Rs 53,290 crore, even as net profit dipped 13.2% to Rs 4,832 crore. EBIT was up 0.1% over the year ago to Rs Rs 8,029 crore, even as EBIT margin shrank 290 basis points to 15.1%. The free cash flow stood at Rs 4,002 crore.

Tech Mahindra’s board has recommended a final dividend of Rs 32 per share, taking the total payout to Rs 50 per share for the full fiscal.

The March quarter results come against the backdrop of a leadership transition at the Mahindra Group firm—CEO CP Gurnani is making way for former Infosys Ltd. President Mohit Joshi at the helm as he is set to achieve superannuation at the end of this year. While that’s seen as a positive, especially since Joshi is a financial services veteran, a growth turnaround is still awaited.

During the quarter, Tech Mahindra also announced that it will invest up to Rs 700 crore in its newly carved out Products & Platform division in the next two years to make it a billion dollar enterprise. The investment will be led by group company Comviva’s Gurugram-based team.

On Thursday, Tech Mahindra shares rose 0.80% to Rs 1,004.20 apiece on the BSE, even as the benchmark Sensex ended the day 0.58% higher at 60,649.38 points. The quarterly results were declared after market hours. Bloomberg

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