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IT services firm Tech Mahindra’s consolidated net profit more than doubled to ₹1,222 crore in the quarter ended March 31, as the company improved on operational efficiencies supported by currency gains.
The company had posted a net profit of ₹587.9 crore in the same period a year ago.
Tech Mahindra’s consolidated revenue from operations of Tech Mahindra increased by 7.4 per cent to ₹8,054.5 crore in the reported quarter from ₹7,495 crore in the same period of 2016-17.
The Pune-headquartered company’s headcount went from 115,241 in the third quarter to 112,807 in the March quarter.
“Continued focus on operational metrics has led to improved performance through the year. Growth in digital areas is particularly encouraging,” said Managing Director and CEO CP Gurnani.
“Our digital business is more high value. For that I need different set of manpower. As my digital business has grown, my headcount has come down because the linearity ended from the ‘run’ business, which is typically a linear business, while ‘change and grow’ is about high end. We have been aggressive on automation, AI inside and outside and that has shown results,” Gurnani said, adding that the company is aggressively adopting bots to improve efficiencies.
This also helped Tech Mahindra improve its utilisation levels, which stood at 88 per cent in the quarter under review, an improvement of about 3 per cent. Margins have also significantly improved from 12 per cent last year to 17.5 per cent in the March quarter this year. Top-5 client revenue was up 2.9 per cent quarter-on-quarter after four quarters of decline, while top 10-20 client revenue was up 13.4 per cent QoQ.
Gurnani said the company shed about $100 million worth of telecom business from its under-performing LCC unit, which helped improve margins.
“It’s been a great year of execution despite volatility in the market place. Our customer accolades and various recognitions for sustainability reflect well on our long term strategy for growth,” said Vice-Chairman Vineet Nayyar.
For 2017-18, the company posted about 35 per cent rise in net profit at about ₹3,800 crore, while revenue increased by 5.6 per cent to about ₹30,773 crore from the previous fiscal.
Tech Mahindra also announced that its Chief Financial Officer Milind Kulkarni will retire on May 31 on reaching the superannuation age. Kulkarni will be succeeded by Manoj Bhat from June 1.
The board has recommended a final dividend of ₹14 per share on par value of ₹5 for the financial year ended March 31, 2018, subject to approval by the members of the company at its Annual General Meeting.
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