The Hindu Business Line : Tech Mahindra bags $700-m outsourcing deal from BT

Mumbai, July 21 The sixth largest software vendor, Tech Mahindra, has bagged a $700-million (about Rs 2,975 crore) outsourcing deal from its largest client and shareholder - the UK-based BT group, for a five-year period.

As per the contours of the deal, Tech Mahindra will assist the UK-based telecom and broadband conglomerate in transforming its IT infrastructure so that it may translate into enhanced customer experience for the telco’s subscribers, Mr Sanjay Kalra, President, Strategic Initiatives, Tech Mahindra, said in a telephonic chat, here on Monday.

This is the same engagement for which the city-based company paid $110 million (Rs 440 crore), so that it may get exclusive negotiating rights for 90 days, with BT. (Due to this, the firm reported a net loss of Rs 329 crore in the previous sequential quarter.) “This deal would also follow a J-curve pattern where there will be an initial phase of investment,” said Mr Kalra.

$2-b order backlog

With this engagement, the Mahindra group company would have a backlog of orders worth $2 billion from BT alone, said Mr Kalra. Prior to this, the company had won two engagements from BT - one worth $1 billion and the other valued at over $350 million - in the last two years. Both Tech Mahindra and the BT group have worked together for about 20 years on a range of projects, according to a news release. Tech Mahindra is a joint venture company between BT and the Mahindra group.

BT and Tech Mahindra are in a planning phase for the project and more details will be announced at the appropriate time, the release said.

Q1 net up

Tech Mahindra announced a 51.7-per cent rise in net profit for the first quarter of the current fiscal.

The net profit was up at Rs 258.50 crore, as against Rs 170.30 crore reported in the year-ago period.

Total revenues for the quarter rose 28.4 per cent to Rs 1142.4 crore (Rs 889.4 crore), with maximum revenue being generated from Europe and the US, according to Mr C.P. Gurnani, President (International Operations), Tech Mahindra.

Reacting to the development, the Tech Mahindra scrip hit an intra-day high of Rs 682, before settling at Rs 679.1, 1.8 per cent higher than the previous day’s close on the Bombay Stock Exchange.

Related Stories:
BT deal spells revenue visibility for Tech Mahindra
Diversification for Tech Mahindra
Tech Mahindra focuses on large fixed-price deals

More Stories on : Financial Performance | Software | Outsourcing | Telecommunications

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Locally heavy rain in TN, Karnataka

Q1 cement despatches rise

Dhaka told to improve connectivity to cut trade deficit

One-year return turns negative for most diversified schemes

Will UPA govt pull it off?

Tech Mahindra bags $700-m outsourcing deal from BT

Maruti Q1 net skids despite higher sales

Dr Reddy’s net down 26% at Rs 134 cr

Re, input costs hit auto parts export growth rate

Pepper exporters gain from sale calls in futures

Markets cautious ahead of vote

Indian Bank (Rs 101.80): Buy

Courier industry reels under high oil price; costs rise 30%