Information technology (IT) firm Tech Mahindra on Wednesday said the industry is not clear on what is the way out from the economic scenario world wide.
It said few economies are in distress and nationalism of individual countries is overtaking prudent economic management. There is pressure on banking institutions, especially because of situation in Greece. And because the future of Euro zone is becoming increasingly uncertain, it is a concern for Indian IT players as well.
“Fiscal defcit has moved up, interest rates are gone up and the rupee is sinking. It is in this situation that we must look at the IT industry. The economic distress in the country is huge at this time,” Mr Vineet Nayyar, Vice-Chairman, Managing Director and Chief Executive Officer, Tech Mahindra told reporters.
However, he said, Tech Mahindra, which generates 98 per cent of its revenue from telecom services worldwide, has opportunity as most of the telecom firms are now looking at outsourcing their services through such companies to reduce cost.
“Because of the distress, most of the telecom firms in Europe, the US and in Asia are trying to reduce their operational expenditure and that is changing the nature of business for companies like ours,” Mr Nayyar said.
He said the company is now also running large number of telecom firms in Asia and Australia. The company expects six-seven deals to come up soon from worldwide. Meanwhile, the company reported net profit of Rs 302.5 crore for the fourth quarter ended March 31, 2012, up 228.44 per cent as compared to Rs 92.1 crore in fourth quarter 2011.
The company's revenue during the quarter was recorded at Rs 1,419 crore, up 12.48 per cent year-on-year as against Rs 1,261.5 crore in a year ago period. The board of directors have recommended a dividend of Rs 4 per equity share on face value of Rs 10 each (40 per cent), for the financial year ended March 31, 2012.
The company said its total headcount as on March 31, stood at 40,763 with software professional headcount at 24,833, business process outsourcing (BPO) at 14,792 and support staff at 1,138.
The Cash and Cash equivalent stood at Rs 402 crore, it said. The company's threefold jump in profit was led by strong performance by Satyam as merger between the two companies was announced beginning this year. On latest update of its merger with Satyam, Mr Nayyar said the boards of both companies would meet next month to approve the merger. A proposal will be sent to court for approval after that. The deal has already got clearance from the Competition Commission of India, he said.
The company also said Mr C.P. Gurnani, Chief Executive Officer of Satyam, would take over as the CEO and Managing Director of Tech Mahindra as well after the approval from the Government, that might take about a month's time.
Mr Nayyar would continue as Vice-Chairman of Tech Mahindra. Tech Mahindra's shares in BSE was down by 0.89 per cent to Rs 661.90 as compared to previous close.