Mumbai: Tech Mahindra announced a 20.25 percent drop in its December quarter net at Rs 805.3 crore due to currency losses and wage hikes.
In the year ago period, the IT services provider had posted a post-tax profit of Rs 1,009 crore. Overall revenue grew to Rs 5,751.17 crore in the third quarter under review, up from Rs 4,898.5 crore in the year-ago period. The operating profit was also up at Rs 1,160 crore as against Rs 1,136 crore last year.
There was an impact of 0.20 percent in pre-tax margins due to currency fluctuations, 1 per cent on portion of wage hikes which were unmitigated and disappearance of USD 9.5 million in revenues in amortisation from British Telecom, its key client, Tech Mahindra CFO Milind Kulkarni said. Additionally, a sharp increase in tax provisions at Rs 251.2 crore versus the year-ago period’s Rs 26.4 crore also impacted the bottomlines, but Kulkarni was quick to point out that this was due to a Rs 120 crore write-back in provisions for Satyam acquisition in the year-ago period.
Its pre-tax margin increased by 0.20 percent to 20.1 percent. The expansion was restricted by the adverse impact in currency deviations, even though the overall utilisation rate improved to 74 percent. Tech Mahindra CEO and Managing Director C P Gurnani said there is still a scope to improve margins by better utilisation, and specifically pointed to the 3-4 percentage point gap between the company and its rivals on this front.
