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Software exporter Tech Mahindra today reported a 10.17 per cent increase in December quarter net at ₹ 943 crore, helped by a margin expansion.
The Mahindra group company’s revenues grew 2.9 per cent to ₹ 7,776 crore for the reporting quarter year-on-year and 2.2 per cent over the preceding quarter.
Profit growth was largely helped by a widening of the margin to 16.3 per cent from 15.7 per cent in the year-ago period and 14.5 per cent in the preceding quarter.
Earnings per share stood at ₹10.73 for the quarter, the company said.
Chief financial officer Milind Kulkarni attributed the higher margins to a jump in utilisation which rose to 83 per cent and a change in business mix that saw the company moving away from low-yielding work, which helped the company offset the headwinds due to the seasonal furloughs especially at telecom clients.
Its total headcount came down by almost 2,000 on a 17 per cent attrition rate to 1.15 lakh.
Chief executive CP Gurnani said the linearity between revenue growth and job creation is lost because of automation and also declined to give a guidance on the employees front in the future.
As more and more new deals are on the digital front--it accounted for 16 of the 18 new deal wins--the proportion of revenue from emerging technologies front grew to 24 per cent for the company.
The company added 18 active clients compared to the trailing September quarter, taking the active client count to 903, he said.
Gurnani said the company has a “reasonably good” order book at present and sees tech spends going up even though the core IT services may be “stagnant“.
It will continue to invest in emerging areas like artificial intelligence and blockchain, among others, he said.
From a geographical perspective, the US and Europe reported a growth of 6.3 and 1.8 per cent, respectively, while the rest of the world declined by 3.2 per cent.
Gurnani said the banking, financial services and insurance vertical de-grew after nine quarters, while the enterprise segment clipped at 4.3 per cent on a quarter-on- quarter basis.
The company scrip closed 1.14 per cent up to close at ₹ 605.40 on the BSE, as against a 0.65 per cent gain on the benchmark.
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