Tech Mahindra rides high on BT business

Tech Mahindra rides high on BT business

Bangalore: Information technology services firm Tech Mahindra Ltd said fiscal second quarter profit rose 66.7% to Rs302.80 crore as it won more business from its largest investor and customer, BT Group Plc., with which it has outsourcing contracts worth at least $2 billion (Rs9,760 crore) over the next seven years.

Revenue increased 29.8% to Rs1,164.80 crore for the July-September period, the firm said in statement. Sequentially, or compared with the April-June quarter, the company posted a 17% growth in profit and a 4.33% growth in revenue.

Tech Mahindra, which focuses on providing software services largely to telecom firms and earns about 60% of its revenue from BT, formerly known as British Telecommunications, had reported a profit of Rs181.60 crore on revenue of Rs897.50 crore in the second quarter last year.

Technology services providers are struggling in the face of a global economic downturn, stemming from the financial industry turmoil in the US that has led governments to offer bailouts worth hundreds of billions of dollars.

“In times likes this, it is predictability (in revenue) that matters than raw growth," said Sanjay Kalra, president of Tech Mahindra, in a phone interview. The company has an order book of $3 billion, of which one-third is from BT, he added. BT holds a 30.99% stake in Tech Mahindra.