Tech Mahindra reports ~29% growth in Q1 revenue; stock slips ~3%

26 Jul 2024 , 10:45 AM

Tech Mahindra Ltd. announced a constant currency sales growth of 0.7% for the April-June period, somewhat higher than the previously reduced projections of 0.4% to 0.5%.

Tech Mahindra joined Infosys, TCS, and LTIMindtree as the fourth of the Nifty 50’s six IT equities to report positive revenue growth in constant currency terms. HCLTech and Wipro both experienced negative growth this quarter.

In US dollars, the company’s revenue was $1,559 Million, up 0.8% from the March quarter. In currency terms, Tech Mahindra’s topline increased by 1% to ₹13,005.5 Crore.

The net profit for the period climbed by 28.8% to ₹851.5 Crore. The margin increased by almost 100 basis points to 8.5% from 7.35% in the March quarter. The company’s management stated that they have not yet decided on wage increases and will make that decision in the second half of the fiscal year, depending on the company’s financial situation.

Manufacturing, retail, and healthcare businesses all grew during the quarter, while the core communications vertical had a fall in forecasted lines. Even still, the communications vertical accounts for one-third of Tech Mahindra’s total revenue.

Mohit Joshi, the company’s MD and CEO, told reporters on a post-earnings call that the telecom industry trajectory is improving, but emphasised that green shoots are not budding, but the rate of decrease is slowing.

Tech Mahindra won deals worth $534 Million during the quarter, the most in the previous three quarters and more than the $359 Million it won during the same period last year.

At around 10.01 AM, Tech Mahindra was trading 2.14% lower at ₹1,497.20 per piece, against the previous close of ₹1,530 on NSE. The counter touched an intraday high and low of ₹1,530, and ₹1,444.25, respectively.

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