Interest costs erode Tech Mahindra Q2 profit

Interest costs erode Tech Mahindra Q2 profit
PTI
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First Published: Wed, Jul 22 2009. 10 30 PM IST
Updated: Wed, Jul 22 2009. 10 30 PM IST
Mumbai: Information technology services firm, Tech Mahindra Ltd, on Wednesday reported a 49% drop in net profit due to the interest costs on borrowings to fund its acquisition of fraud-hit Satyam Computer Services Ltd.
Net profit in April-June quarter was Rs131.62 crore, the company said in a filing to the Bombay Stock Exchange (BSE).
Tech Mahindra, which recently acquired a controlling stake in Satyam Computer, rebranded as Mahindra Satyam, had a net profit of Rs258.52 crore in the same quarter last year.
Revenue fell 5% to Rs1,086.88 crore from Rs1,142.50 crore in the year-ago period.
On a quarter-on-quarter basis, the company’s net profit dropped 43% from Rs230.40 crore in the March quarter of 2008-09.
“This decline in net profit was primarily due to interest costs on borrowings post the Satyam acquisition,” Tech Mahindra said.
The company’s debt stood at Rs2,380.2 crore as on 30 June, it said in the filing.
“This has been a momentous quarter which has redefined Tech Mahindra’s positioning in the marketplace,” vice-chairman Vineet Nayyar said. “Not only has our leadership position in telecom been reinforced, but our presence has expanded across other industry verticals as well.”
The company’s headcount increased by 510 employees to 25,482 at the end of June.
On a stand-alone basis, Tech Mahindra reported a 47% decline in net profit at Rs134.70 crore for the quarter ended June. It had a net profit of Rs254.36 crore in the corresponding quarter of the previous fiscal.
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First Published: Wed, Jul 22 2009. 10 30 PM IST