Tech Mahindra’s profit grows 25.8% to ₹1,339 crore in Q2

Our Bureau Mumbai | Updated on October 26, 2021

CP Gurnani, MD, and CEO, Tech Mahindra   -  Businessline

Acquires 2 firms for $117 million

Tech Mahindra on Monday reported 25.8 per cent year-on-year growth in profit after tax for the second quarter of FY22 at ₹1,339 crore compared to ₹1,064.6 crore in the same quarter last fiscal. On a sequential basis, profit was down by 1.1 per cent.

The company’s revenue during the reporting quarter was its highest over the past decade. Revenue increased 16.1 per cent YoY to ₹10,881 crore against ₹9,371.8 crore in Q2FY21. It was up 6.7 per cent QoQ.

CP Gurnani, MD, and CEO, Tech Mahindra, said, “We have been focusing on sustainable profitable growth. We have seen a significant acceleration in growth led by 5G. All our key growth verticals BFSI, HLS and high tech continue to grow at a good pace. We have seen an overall increase in technology spending.

The company deal wins for the quarter was around $750 million. Key verticals CME grew 6.7 per cent while enterprise segment grew 6.3 per cent.

The company’s board announced a special dividend of ₹15 per share. Total headcount post the quarter was 1,41,193, an addition of 14,930 in Q2.

The attrition rate for the quarter was 21 per cent compared to 17 per cent in Q1 and 14 per cent in Q2FY21.

New acquisitions

Tech Mahindra announced two acquisitions of around $117 million. The first one is a California-based digital engineering firm Lodestone (Infostar LLC), which has been acquired in a cash deal of $105 million. The acquisition is expected to help the IT major strengthen its comprehensive digital engineering capabilities to provide end-to-end product quality assurance across hardware, software, and data layers.

Vivek Agarwal, President, BFSI, HLS and Corporate Development, Tech Mahindra, said: “The acquisitions are building high growth capabilities. As enterprises transform, they will spend a lot in digital products. And this capability we are bringing in through acquiring digital engineering firm Lodestone. We will be able to provide a comprehensive offering.”

London-based We Make Websites was acquired for an enterprise value of around £9 million. The company is a Shopify-focussed enterprise e-commerce agency. The acquisition is an add-on to strengthen Tech Mahindra’s experience design capabilities.

Published on October 25, 2021

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