Tech Mahindra Q1 net profit falls 16 per cent

Ayushi Kar | | Updated on: Jul 25, 2022
 CP Gurnani, Managing Director and CEO, Tech Mahindra

CP Gurnani, Managing Director and CEO, Tech Mahindra | Photo Credit: NAGARA GOPAL

The company clocked net new deals worth $802 million in the quarter

Tech Mahindra on Monday reported a 16 per cent year-on-year decline in profit at ₹1,131 crore in Q1 FY23, against ₹1,365-crore profit in the same period last year. On a quarter-on-quarter basis, profit after tax de-grew nearly 25 per cent, from ₹1,505 crore reported in Q4FY22. 

Revenue from operations grew 24.6 per cent year on year, from ₹10,197.6 crore in Q1FY22 to ₹12,708 crore  in Q1FY23. 

The company clocked net new deals worth $802 million of which CME (communications, media & entertainment) was worth $320.8 million, while the remaining $481.2 million came from the enterprise segment. For Q1FY22, Tech Mahindra had bagged net new deals worth $815 million. 

Positive on deals

CP Gurnani, Managing Director and Chief Executive Officer of Tech Mahindra, said, “On the performance side we have done a good job of integrating all our investments, building a culture of innovation, creating new service offerings like metaverse and also helping deliver differentiated and more futuristic solutions for our customers. In constant currency we have grown 3.5 per cent, CME has grown 3.9 per cent, and Enterprise business has grown 3.2 per cent. We are positive about our deal pipeline and enthusiastic about our ability to harness and win some of the deals from that pipeline. And happy about the investments that we made in 5G, investments in cloud IoT and now in metaverse all coming together. We are confident that we will be presenting industry-leading growth in the next quarters and we are also confident that we will have the opportunity to work on profitability levers. Next few quarters we are determined to deliver better profitability”.

Gurnani said that parts of the world are worried about the economic headwinds related to inflation, energy crisis, and how sectors will respond if there is a slowdown. He said Tech Mahindra will continue to deliver a stronger performance in these stronger economic headwinds.

Tech Mahindra reported an attrition rate of 22 per cent, down sequentially from Q4FY22 when it was 24 per cent. The company will focus on profitability and operational excellence, according to a spokesperson.

On mergers and acquisitions and portfolio synergies, the company will be selective, given the fact that it was active in the M&A space last year. The focus for the future will be on integration and a unified Tech Mahindra portfolio.  

Published on July 25, 2022
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