Aided by Satyam's strong performance, Tech Mahindra, on Wednesday, posted a more than three-fold rise in net profit to Rs.302.5 crore for the fourth quarter ended March 31, 2012, but expressed caution over the economic distress in Europe. The net profit stood at Rs.92.1 crore in the year-ago period. Revenues grew 12.48 per cent to Rs.1,419 crore from Rs.1,261.5 crore.
“We are passing through uncertain times. Eurozone continues to be in challenge globally and it is not clear what is the way out. One thing is certain that a few economies are in huge distress and nationalism of individual countries is overtaking prudent economic management,” Tech Mahindra Vice-Chairman, MD and CEO Vineet Nayyar told reporters here.
Because of the economic turmoil in Greece, there was a huge stress on banking institutions and the economy of Europe and that the future of eurozone was becoming increasingly uncertain, he added. “It's better in the U.S. than in Europe but we are seeing elements of slowdown there as well. But it should grow fairly well for us as we have some large partnerships there,” he added.
The board of directors have recommended a dividend of Rs.4 per share.
The European region contributed 46 per cent to the company's revenues for the quarter ended March 2012, while that from North American market and the Rest of the World (RoW) stood at 34 per cent and 20 per cent, respectively.
“Closer home, the situation is not much better. Fiscal deficit has grown hugely, growth has slowed down, interest rates are up and the rupee is sinking. It is in this situation, that we must (now) look at the IT industry,” Mr. Nayyar said.
The Indian IT sector has warned of a volatile global economy, which may lead to reduced client spending.
While companies such as Infosys and Wipro have given muted earnings guidance for the quarter ahead, industry body Nasscom has till now stuck to its forecast of 11-14 per cent growth for the ongoing fiscal.
For the year ended March 31, 2012, Tech Mahindra's net profit grew 70 per cent to Rs.1,095.4 crore, while revenues were up 6.7 per cent at Rs.5,489.7 crore.
Total headcount stood at 40,763 as of March 31, 2012, with software professional headcount at 24,833. Number of BPO professionals stood at 14,792, while support staff was 1,138 at the end of March 2012. The cash and cash equivalent stood at Rs.402 crore as on March 31, 2012.