Tech Mahindra Q2 beats estimates; profit rises 4.7% to Rs 836 cr, dollar revenue up 3.6%

Moneycontrol News

Software firm Tech Mahindra's second quarter earnings beat analyst expectations on Wednesday as profit grew by 4.7 percent sequentially (up 29.7 percent year-on-year) to Rs 836 crore despite fall in other income and forex gain, backed by operational performance.

Rupee revenue during the quarter grew by 3.7 percent quarter-on-quarter to Rs Rs 7,606 crore and dollar revenue increased 3.6 percent to USD 1,179.2 million, which were far ahead of analyst estimates.

"With our DAVID (digitisation, automation, verticalisation, innovation and disruption) strategy at play, we have posted reasonably good growth in the quarter across revenue, profit and new business," C P Gurnani, CEO and MD, Tech Mahindra said.

Numbers were ahead of estimates as profit was expected at Rs 740 crore on revenue of Rs 7,551 crore and dollar revenue at USD 1,173 million for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Earnings before interest and tax (EBIT) shot up 22.2 percent sequentially to Rs 840 crore and margin expanded by 160 basis points to 11 percent for the quarter ended September 2017, which too were ahead of CNBC-TV18 poll estimates of Rs 793 crore and 10.5 percent, respectively.

Forex gain for the quarter declined 16.7 percent to Rs 227 crore and other income fell 21.5 percent to Rs 322.2 crore compared with previous quarter.

Tech Mahindra said it has added 21 clients during the quarter, taking total active clients list to 885.

The company added 7 clients under USD 10 million category, 8 in USD 5 million band and 13 in USD 1 million band.

Attrition rate (LTM) for the quarter declined to 16 percent against 17 percent in previous quarter, it added.

IT utilisation in Q2 improved to 81 percent from 77 percent on sequential basis while IT utilisation (excluding trainees) was unchanged at 81 percent QoQ.