Home >Companies >Company Results >Tech Mahindra beats estimates; Q1 PAT up 1.4% YoY, revenue rises 5.2%
Manufacturing was the worst hit vertical, with revenue from the segment declining 11% sequentially. (Photo: Reuters)
Manufacturing was the worst hit vertical, with revenue from the segment declining 11% sequentially. (Photo: Reuters)

Tech Mahindra beats estimates; Q1 PAT up 1.4% YoY, revenue rises 5.2%

  • In dollar terms, revenue was at $1,207.5 million, down 6.7% from a quarter ago and 3.2% on year
  • The company reported deal wins worth $300 million during the quarter under review

MUMBAI: Information technology services provider Tech Mahindra on Monday reported a consolidated net profit of 972 crore for the first quarter of fiscal 2021, up 20.9% sequentially and 1.4% year-on-year.

Revenue from operations grew to 9,106 crore, down 4% sequentially but up 5.2% from the year-ago period.

June quarter earnings beat consensus estimates which had pegged revenue at 9,000.40 crore and net profit at 748.50 crore.

In dollar terms, revenue was at $1,207.5 million, down 6.7% from a quarter ago and 3.2% YoY. Analysts had expected dollar revenue to decline 9.3%.

"We are witnessing a wave of new age technologies being adopted by the customers as businesses across the globe are actively pursuing digital transformation. We are well positioned to capture such spends and our endeavor is to be back on the growth path amid increased signs of demand normalization," said CP Gurnani, managing director and chief executive, Tech Mahindra.

Gurnani said 5G enterprise projects were delayed in Q1, although the company is prepared for opportunities in the space. He added that clients have started spending on technology adoption initiatives like cloud and digital transformation.

The company reported deal wins worth $300 million during the quarter under review, with $100 million worth of communication contracts and $190 million in enterprise space.

Manufacturing was the worst hit vertical, with revenue from the segment declining 11% sequentially. Technology, media and enterprise revenue grew 13%. Communications reported an 8.6% sequential decline in income.

"Despite demand uncertainty and volume reduction, we have been able to demonstrate operational resilience through cost optimization. Cash conversion has been strong, while we aim to improve profitability margins as demand normalises," said Manoj Bhat, chief financial officer, Tech Mahindra, said.

Tech Mahindra has a large presence in China, which the company has been monitoring since the initial days of covid-19 outbreak in Wuhan. A decline in revenue during the quarter was expected due to cross currency headwinds, impact to network business revenues and business process services, project deferrals, and lower employee utilization due to the pandemic.

The company’s shares closed 1.7% higher on the BSE at 664.05 today. So far, most IT companies have posted better-than-expected results for the April-June period, resulting in a huge upside in their stock prices.

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