Tech Mahindra profit jumps over 2-times to ₹1,250 crore in Jul-Sep quarter
Oct 19, 2024, 10:35 IST
IT services firm Tech Mahindra on Saturday reported a more than two-fold jump in its consolidated net profit to Rs 1,250 crore for the July-September quarter, driven by special income from the sale of assets. The Mahindra Group company posted a net profit of Rs 493.9 crore in the year-ago period, according to an exchange filing.
Revenue rose by 3.49 per cent to Rs 13,313.2 crore in the second quarter of 2024-25 compared to Rs 12,863.9 crore in the same quarter of 2023-24.
"Other income includes gain on sale of property of Rs 4,502 million which comprises of freehold land and its related buildings along with the furniture & fixtures sold for a consideration of Rs 5,350 million, receivable over a period of four years along with interest of 8.2 per cent p.a," the company filing said.
Sequentially, net profit rose by 46.81 per cent and revenue by 2.36 per cent.
"We continue to progress on our strategic improvement efforts even as the overall IT services industry has remained soft.
"We have focused on strengthening client relationships and expanding the partner ecosystem while maintaining a sharp focus on operational excellence through project Fortius, which has resulted in an expansion of margins for the third sequential quarter," Tech Mahindra CEO Mohit Joshi said.
The CEO unveiled Project Fortius in April, a three-year plan to achieve a 15 per cent operating margin with a focus on organic growth.
"This quarter we see consistent performance around increasing deal wins, revenue growth, cost optimisation and steady free cash flow generation as we continue our journey towards FY27 stated targets. In line with our capital allocation policy the board has declared an interim dividend of Rs 15 per share," Tech Mahindra CFO Rohit Anand said.
The company's TCV (Total Contract Value), or net new deal wins, stood at USD 603 million in the second quarter of FY25.
Joshi further said the company is on the right path for a long-term sustainable transformation, with its leading indicators moving in the right direction, and its 'Scale at Speed' narrative resonating in the market.
"We continue to invest in strengthening our fresher hiring program, building the right mindset and future skilling and associates, by building capabilities in AI-first and cloud-first skill sets," he told reporters.
Investments shall continue in creating and sustaining an outcome-driven learning organisation and cultivating a high-performance culture based on the pillars of simplifying, clarifying, innovating and driving a high-performance orientation, he added.
This year could be volatile because we are in the turnaround phase, Joshi said.
"I am confident, however, that the platform is being set for a long-term, valuable franchise thanks to a high-calibre and united leadership team and a clearly articulated strategic plan," Joshi said.
Shares of Tech Mahindra settled at Rs 1,688 apiece on the BSE on Friday, down 0.68 per cent from the previous close.
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Revenue rose by 3.49 per cent to Rs 13,313.2 crore in the second quarter of 2024-25 compared to Rs 12,863.9 crore in the same quarter of 2023-24.
"Other income includes gain on sale of property of Rs 4,502 million which comprises of freehold land and its related buildings along with the furniture & fixtures sold for a consideration of Rs 5,350 million, receivable over a period of four years along with interest of 8.2 per cent p.a," the company filing said.
Sequentially, net profit rose by 46.81 per cent and revenue by 2.36 per cent.
"We continue to progress on our strategic improvement efforts even as the overall IT services industry has remained soft.
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The CEO unveiled Project Fortius in April, a three-year plan to achieve a 15 per cent operating margin with a focus on organic growth.
"This quarter we see consistent performance around increasing deal wins, revenue growth, cost optimisation and steady free cash flow generation as we continue our journey towards FY27 stated targets. In line with our capital allocation policy the board has declared an interim dividend of Rs 15 per share," Tech Mahindra CFO Rohit Anand said.
The company's TCV (Total Contract Value), or net new deal wins, stood at USD 603 million in the second quarter of FY25.
Joshi further said the company is on the right path for a long-term sustainable transformation, with its leading indicators moving in the right direction, and its 'Scale at Speed' narrative resonating in the market.
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"We have invested in strengthening the capabilities in the focus service lines by broadening the leadership and investing in technical specializations. "We continue to invest in strengthening our fresher hiring program, building the right mindset and future skilling and associates, by building capabilities in AI-first and cloud-first skill sets," he told reporters.
Investments shall continue in creating and sustaining an outcome-driven learning organisation and cultivating a high-performance culture based on the pillars of simplifying, clarifying, innovating and driving a high-performance orientation, he added.
This year could be volatile because we are in the turnaround phase, Joshi said.
"I am confident, however, that the platform is being set for a long-term, valuable franchise thanks to a high-calibre and united leadership team and a clearly articulated strategic plan," Joshi said.
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The Pune-headquartered firm added 6,653 employees during the quarter under review, bringing the total staff count to 1,54,273. Shares of Tech Mahindra settled at Rs 1,688 apiece on the BSE on Friday, down 0.68 per cent from the previous close.
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