Tech Mahindra reported a 5.6% growth in its second quarter net profit to ₹1,124 crore on lower taxation.
The rise in profit came on a 4.81% growth in revenue to ₹9,070 crore with digital contributing 39% of the total revenue during the quarter.
Company’s EBITDA stood at ₹1,501 crore with margin of 16.5%.
New deal wins in the second quarter stood at a record high of $1.49 billion as it signed a multi-year agreement with AT&T to expand strategic collaboration, accelerating AT&T’s IT network transformation, shared services modernisation and movement to the cloud.
C.P. Gumani, MD and CEO, Tech Mahindra, said: “Our consistent large deal win is a testimony of our differentiation in the marketplace. We are confident of our growth outlook for both communications and enterprise businesses. ‘Digital’ continues to be a strong growth driver, as we help our customers in their transformation journey.”
The company’s attrition rate during the quarter remained unchanged at 21%.
The company’s board has approved the proposal to acquire 100% stake in U.S.-based Born Group for a consideration of $95 million.
Born Group offers solutions in digital engagement, strategy consulting, content creation and digital production.
Vivek Agarwal, head of corporate development and portfolio companies, Tech Mahindra, said, “Digital continues to be the central theme of our acquisition strategy at Tech Mahindra. The acquisition of Born Group will assert our leadership in the rapidly-growing electronic and mobile commerce segment globally, and equip us to deliver enhanced user experience to our customers globally.
“We have witnessed a broad-based growth across geographies and across our customers. We continue to focus on margin improvement while transitioning some of the large deals in a volatile macroeconomic environment,” said Manoj Bhat, CFO, Tech Mahindra.
Tech Mahindra shares on BSE closed up 0.49% to ₹773.15 in a weak Mumbai market on Tuesday.
Paras Bothra, president equities at Ashika Stock Broking, said, “Both, IT and BPO segments reported a healthy revenue growth of 4.7% and 6.2% QoQ. IT service EBIT margin during the quarter improved by 171 bps QoQ to 17% while BPO services’ EBIT margin witnessed 206 bps QoQ decline to 12.1%.”
