CP Gurnani, the Managing Director and CEO of Tech Mahindra, commented that the company’s recent performance demonstrates the current uncertainty and unpredictability of the global economy and the IT industry.
In June 2023, the IT services company Tech Mahindra disclosed its financial outcomes for the quarter. During this period, they made a consolidated net profit of Rs 693 crore, which is 39% lower compared to the same quarter last year when they earned Rs 1,131 crore.
The revenue from their operations increased by 4% compared to last year, reaching Rs 13,159 crore. However, this was below the expected revenue of Rs 13,470 crore. In dollar terms, their revenue was $1601 million, which is 2% lower than last year and 4% lower compared to the previous quarter. If we account for currency changes, the revenue decreased by 4.2% sequentially.
Their earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter decreased by 29% compared to last year, amounting to Rs 1,338 crore.
The company faced challenges in different segments. Revenue from communications, media, and entertainment (CME) dropped by 8% compared to last year, while revenue from BFSI (Banking, Financial Services, and Insurance) fell by 5.4%. On the positive side, revenue from manufacturing and technology increased by 8.6% and 8% respectively in the first quarter.
During the June quarter, Tech Mahindra secured new deals worth $359 million, marking a significant decrease from the $802 million recorded in the corresponding period of the previous year.
At the conclusion of the June quarter, the company had a total headcount of 148,297, reflecting a decrease of 4,103 individuals in comparison to the previous quarter. Their cash and cash equivalent holdings as of June 2023 amounted to Rs 7,701 crore.
Voluntary attrition, which measures the rate at which employees leave the company on their own, decreased to 13% in the first quarter, down from 15% in the preceding March quarter and 22% in the same quarter last year.
Tech Mahindra recognized the tough circumstances in the worldwide economy and the field of IT. The company’s CFO, Rohit Anand, mentioned that they faced strong headwinds in revenue growth, affecting profitability. However, they are taking swift actions to address these issues and improve their execution.
Even though they faced a setback, the management of Tech Mahindra remained confident in their strategy and team. They have the goal of providing lasting value for their customers and shareholders.
On the stock market, Tech Mahindra’s shares closed 1.08% lower at Rs 1,144 on the National Stock Exchange (NSE).