Tech Mahindra Q1 beats Street view, sees prospects in digital transformation wave

Mumbai: IT firm Tech Mahindra managed to beat estimates as it reported a flat net profit in the quarter ended June which was marked with Covid-19 pandemic, and said it was witnessing digital transformation across the globe, and was well-positioned to capture opportunities.

The company reported a flat 1.36 per cent year-on-year (YoY) rise in net profit at Rs 972.30 crore for the quarter ended June. On a quarter-on-quarter (QoQ) basis, the bottomline grew 20.94 per cent. Analysts in an ET NOW poll had projected the figure at Rs 760 crore.

Here are the key takeaways from Tech Mahindra’s Q1 results:

Revenue edges up
Consolidated revenue of the company increased 5.23 per cent YoY to Rs 9,106.30 crore during the quarter under review. Revenue in dollar terms witnessed de-growth of 3.20 per cent YoY to $1,207.50 million.

EDITDA drops
EBITDA declined by 1.03 per cent YoY to Rs 1,300.50 crore in Q1FY21, over Rs 1,314.10 crore in Q1FY20.

Opportunities ahead
“We are witnessing a wave of new age technologies being adopted by the customers as businesses across the globe are actively pursuing digital transformation. We are well positioned to capture such spends and our endeavor is to be back on the growth path amid increased signs of demand normalization,” said CP Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra.

Cost optimization helps
“Despite demand uncertainty and volume reduction, we have been able to demonstrate operational resilience through cost optimization. Cash conversion has been strong, while we aim to improve profitability margins as demand normalizes,” said Manoj Bhat, Chief Financial Officer, Tech Mahindra.

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Headcount drops
Total headcount dropped by 1,820 to 1,23,416 from the end of previous quarter.

Clients increase
Number of active clients in the June quarter increased by 8 from the previous quarter to 981.

EPS rises
The earnings per share (EPS) came in at Rs 11.07, compared with Rs 10.98 a year ago.



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