Tech Mahindra Q2 profit plunges 62% to ₹494 cr; revenue drops 2%

IT major Tech Mahindra announced the financial results for the July to September quarter of FY24 on October 25. The company’s consolidated profit after tax stood at ₹ 494 crore, witnessing a decline of 61.6% year-on-year (YoY) against ₹1,285.4 crore in the same period last year. Sequentially, the profit declined 28.7% as against ₹692.5 crore in the June quarter.

In the September quarter, the company’s revenue plunged 2% at ₹12,863.9 crore against ₹13,129.5 crore in the same period last year. The revenue declined 2.2% sequentially, as against ₹13,159 crore in the same period last year. Segment-wise, the company’s revenue from the IT sector stood at ₹10,932.2 crore against ₹11,398.4 crore in the year-ago period. The revenue from BPO services stood at ₹1,931.7 crore, against ₹1,731.1 crore in the corresponding period of the previous year.

Industry-wise, communications, media and entertainment contributed 37% in the company’s revenue in the quarter under review. This was followed by manufacturing (17.8%), banking, financial services and insurance (16.1%), technology (11%), retail transport and logistics (8.2%) and others (10%).

Region–wise, the US contributed 53.3% of the company’s revenue. Europe and the rest of the world contributed 23.6% and 23.2%, respectively in the country's revenue during the quarter under review.   

During the quarter under review, the company bagged 640 new deals. The IT major bagged 716 new deals in the September quarter of FY23. In the September quarter, the IT major’s EBITDA (earnings before interest, tax, depreciation and amortisation) stood at ₹1,072.3 crore, declining by 46% as against ₹1,984.1 crore in the same period last year. The company’s EBITDA slumped by 19.9% sequentially as against ₹1,338 crore in the June quarter.

The company’s employee headcount declined by 8.1% in the September quarter to 1,50,604 as against 1,63,912 in the same period last year. The employee headcount among software professionals and BPO professionals declined by 6.4% and 10.8%, respectively.

The company has declared an interim dividend of ₹12/- per equity share of ₹5/- each i.e. 240% of the face value. The company has fixed November 2, 2023, as the record date for the interim dividend. The interim dividend should be paid on November 21, 2023, according to the company.

Ahead of the Q2 results, the share price of Tech Mahindra closed 1.16% lower at ₹1,141.70. During the session, the company’s market capitalisation stood at ₹1,11,379 crore.