Tech Mahindra Q3 profit increases 4.5% yoy to Rs1,369cr; Stock under pressure

2 Feb 2022 , 09:16 AM

Tech Mahindra Limited, a specialist in digital transformation, consulting, and business re-engineering services, on Tuesday reported a 4.5% yoy higher consolidated profit at Rs1,369cr in the December 31 ended a quarter of 2021 against Rs1,309.8cr in the same quarter last year. PAT was 2.2% qoq higher from Rs1,338.7cr in Q2FY22.

The company’s revenue rose to Rs11,4501cr in Q3FY22, up 5.2% qoq from Rs10,881.3cr and 18.7% yoy from Rs96,47.1cr. EBITDA at Rs2,060cr; up 3.3% qoq, up 8.7% yoy.

Tech Mahindra Ltd was under pressure during early trade on Wednesday. At around 9.21 am, it was trading at rading at Rs1,458.65 per piece down by Rs48.4 or 3.21% from its previous closing of Rs1,507.05 per piece on the BSE.

Financial highlights for the quarter (USD)

• Revenue at USD 1533.5 mn; up 4.1% qoq and up 17.2% yoy
• Revenue growth up 4.7% qoq in constant currency terms
• EBITDA at USD 276.5 mn; up 2.5% qoq, up 7.5% yoy
• Margins at 18.0%
• Profit after tax (PAT) at USD 183.8 mn; up 1.5% qoq and up 3.4% yoy
• Free cash flow at $123 mn, conversion to PAT at 67%

Other Highlights

• Total headcount at 145,067 up 3,874 qoq
• Cash and Cash Equivalent at USD 1345.8 mn as of December 31, 2021

CP Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra, said, “Our people-first approach combined with sustained value creation this quarter reflects our commitment towards redefining possibilities and competencies in the new normal. We continue to strengthen our presence, deliver broad-based profitable growth and value for our customers, backed by future-ready talent and niche digital capabilities.”

Milind Kulkarni, Chief Financial Officer, Tech Mahindra, said, “We continue to transform our operations and add new capabilities enabling us to grow faster while sustaining our profitability. Our focus on operational efficiencies and investments for the future will help us drive exponential value creation in the long run.”

Business Highlights

• Tech Mahindra achieves Premier Consulting Partner Status in the AWS Partner Network(APN). This tier is awarded through successful demonstration of competence on multiple fronts such as technical proficiency, customer satisfaction, thought leadership, & revenue recognition. With this, we join a select group of 125 partners who have achieved the premier status
• Tech Mahindra entered into a strategic collaboration with Sovico group to drive digital transformation & improve agility through technology-led transformation across aviation, banking & insurance, and retail sectors.
• Tech Mahindra announced partnership with ARM 5G Solutions Lab with the aim to aid innovation in network space by providing best-in-class 5G/Open RAN engineering experience, and scalable 5G lab infrastructure to develop & test novel 5G tech & use cases.
• Tech Mahindra launched FiDaaS Solution powered by Alveo to address financial services’ data management challenges. The FiDaaS Solution provides a cloud-based, Centralized Market Data Platform which offers a comprehensive solution for pricing & reference data management also covering end-to-end Financial Data Management requirements.
• Tech Mahindra partnered with Cogniac to provide Al-based Machine Vision Solutions for enterprises globally. This will enhance operational productivity by maximizing the value of image analytics across industries, including automotive, railway, manufacturing & government.