Tech Mahindra Q1 Results: Revenue, Profit Slump As IT Slowdown Bites
Tech Mahindra Ltd. faltered in the first quarter of fiscal 2024, underscoring the slowdown seen in the wider Indian IT services industry.
The Pune-based software service outsourcer's revenue fell 4.07% from the previous three months to Rs 13,159 crore in the quarter ended June, according to an exchange filing on Wednesday. That compares with the Rs 13,579.2 crore consensus estimate of analysts tracked by Bloomberg.
Tech Mahindra Q1 Results: Key Highlights (QoQ)
Revenue down 4.07% at Rs 13,159 crore (Estimate: Rs 13,579.2 crore).
Net profit declines 37.5% to Rs 703.6 crore (Estimate: Rs 1,146.9 crore).
EBIT down 32.4% at Rs 891.4 crore (Estimate: Rs 1,435.9 crore).
EBIT margin at 6.77% vs 9.60% (Estimate: 10.57%).
Attrition rate eases 200 basis points to 13% on last 12-month basis.
Headcount down 4,103 to 1,48,297.
"This quarter was a challenging one for us as revenue growth faced strong headwinds and that had an impact on profitability," Rohit Anand, chief financial officer at Tech Mahindra, said during a virtual media interaction. "We have taken swift and decisive actions to address these issues and improve our execution."
The company's dollar revenue fell 4% sequentially to $1,601 million. In constant currency terms, the top line shrank 4.2%.
"This is one of the toughest quarters I have seen," Chander Prakash Gurnani, chief executive officer at Tech Mahindra, said during a post-earnings virtual media interaction. "While the drop could have been anticipated, some of the macroeconomic headwinds and stretchy dealmaking have impacted our earnings."
Mohit Joshi, Tech Mahindra's CEO designate, who was also present in the visual media conference, concurred. "We've had a challenging set of results today, but going ahead, given the conversations I've had on the road, I'm confident on our medium- and long-term prospects," he said.
On Wednesday, shares of Tech Mahindra fell 0.84% to Rs 1,144.05 apiece on the BSE, even as the benchmark Sensex ended the day 0.53% higher at 66,707.20 points. The quarterly results were declared after market hours.
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