Tech Mahindra Q1 Results: Profit, EBITDA to deal wins - five key takeaways from IT major’s earnings

Tech Mahindra's Q1FY24 numbers were weak, with declining profit and EBITDA. Revenue saw low growth. The company acknowledged the challenging quarter but expressed confidence in delivering long-term value for customers and shareholders.

Nishant Kumar
First Published26 Jul 2023, 05:00 PM IST
Tech Mahindra's revenue for Q1FY24 fell 4.1 per cent quarter-on-quarter. Photographer: Dhiraj Singh/Bloomberg
Tech Mahindra’s revenue for Q1FY24 fell 4.1 per cent quarter-on-quarter. Photographer: Dhiraj Singh/Bloomberg(Bloomberg)

Tech Mahindra's Q1FY24 numbers came weak on expected lines. Its profit and EBITDA declined but revenue saw a low growth on a yearly basis. The company accepted that the June quarter was a challenging one and it said it is confident that it will deliver long-term value for its customers and shareholders.

"Our results this quarter reflect the uncertainty in the global economy and the IT sector. We are confident that we have the right strategy and the right team to overcome this temporary setback and deliver long-term value for our customers and shareholders," said CP Gurnani, Managing Director & Chief Executive Officer of Tech Mahindra.

Rohit Anand, Chief Financial Officer at Tech Mahindra said the June quarter was challenging for the company as revenue growth faced strong headwinds and impacted profitability.

"We have taken swift and decisive actions to address these issues and improve our execution," said Anand.

Here are five key highlights from Tech Mahindra's Q1 results:

Subdued key numbers

The company said its revenue for Q1FY24 fell 4.1 per cent quarter-on-quarter (QoQ) but rose 3.5 per cent year-on-year (YoY) to 13,159 crore. Consolidated PAT (profit after tax) for the quarter under review came at 693 crore, down 38 per cent QoQ and 38.8 per cent YoY.

Tech Mahindra's EBITDA for Q1FY24 came at 1,338 crore, down 33.8 per cent QoQ and 28.8 per cent YoY. Earnings per share (EPS) was at 7.82.

Read more: Tech Mahindra Q1 Results: Net profit declines 38% to 692.3 crore on weakness in key segments

Deal wins remain soft

The company said in Q1FY24, it saw a net new deal win (in terms of the total contract value) of $359 million, against $802 million in the same quarter last year and $592 million in Q4FY23.

Headcount drops

The company saw a fall in the total number of headcounts on both a yearly and quarterly basis. As per its exchange filing, the total headcount as of June 30, 2023, was 1,48,297 which was down 6.2 per cent YoY and 2.7 per cent QoQ.

Segment-wise performance

On expected lines, the company's CME (communications, media and entertainment) vertical exhibited a poor show, witnessing an 8.2 per cent YoY and 9.4 per cent QoQ decline in revenue.

Revenue of BFSI (banking, financial services and insurance) segment saw a 5.4 per cent YoY and 3.2 per cent QoQ decline. Retail, transport and logistics segment saw a 2 per cent YoY and 0.3 per cent QoQ decline in revenue.

However, the manufacturing segment's revenue rose 8.6 per cent YoY and 1.8 per cent QoQ. The technology segment also saw an 8 per cent YoY and 0.1 per cent QoQ rise in revenue.

Weakness across geography

Revenue in the Americas rose 1.4 per cent YoY but declined 0.5 per cent QoQ. Europe revenue fell 5.4 per cent YoY and 6.7 per cent QoQ. In the 'rest of the world' market segment, revenue fell 5.2 per cent YoY and 8.2 per cent QoQ.

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First Published:26 Jul 2023, 05:00 PM IST
HomeCompaniesCompany ResultsTech Mahindra Q1 Results: Profit, EBITDA to deal wins - five key takeaways from IT major’s earnings

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