Tech Mahindra Q2 net profit up 5.6% at Rs 1,124 crore, to acquire Born Group

Tech Mahindra, a subsidiary of the Mahindra Group, on Tuesday reported 5.6 per cent year-on-year (YoY) rise in consolidated net profit at Rs 1,123.90 crore for the second quarter ended June 30. The profit was up 17.2 per cent compared to Rs 959.30 crore in the March quarter.

"The IT firm had posted consolidated net profit of Rs 1,064.30 crore in the same quarter last year," Tech Mahindra said in a filing to the Bombay Stock Exchange.

Consolidated revenue from operations increased by 5.1 per cent to Rs 9069.90 crore in Q2FY20 as compared to Rs 8,629.80 crore in Q2FY19. On the sequential basis, Tech Mahindra's revenue was up 4.8 than Rs 8,653 crore in the June quarter.

During the quarter under review, EBITDA (Earnings before interest, tax, depreciation and amortisation) rose by 14.2 per cent quarter-on-quarter (Q-o-Q) to Rs 1,501 crore, while operating margins improved by 130 basis points (bps) to 16.5 per cent on quarterly basis.

Segment wise, revenue from the IT segment rose by 4.67 per cent to Rs 8,224.5 crore, while the BPO segment's revenue was up 6.23 per cent at Rs 845.4 crore in September 2019 over September quarter of 2018.

On the standalone basis, the IT services company reported a net profit of Rs 1,396.80 crore, while revenue from operations stood at Rs 7,097.50 crore during September quarter of this fiscal.

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The company recorded a revenue growth of 4.1% in constant currency terms.

In US dollar terms, consolidated profit climbed 14.3 per cent Q-o-Q to 158.6 million, while revenue rose 3.2 per cent Q-o-Q to 1,287.2 million.

Commenting on Q2 earnings, CP Gurnani, Managing Director & Chief Executive Officer, said, "We are thankful to our customers for believing in our capabilities despite a tough demand environment. Our consistent large deal wine is a testimony of our differentiation in the marketplace."

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"We are confident of our growth outlook for both Communications and Enterprise businesses. 'Digital' continues to be a strong growth driver, as we help our customers in their transformation journey," Gurnani added.

As of September 30, 2019, the company total headcount stood at 131,522, up 5,749 on the quarter-on-quarter basis.

The company said in the exchange filing that the deal wins in September quarter was at a record high of nearly $1.49 billion.

In a separate development, Tech Mahindra said its subsidiary, Tech Mahindra (Singapore), will acquire US-based Born Group for a cash consideration of upto $95 million. The acquisition, which is expected to be completed by November 15, 2019, will boost capabilities in commerce and customer experience (CX), the IT major said.

Ahead of earnings announcement, shares of Tech Mahindra closed trade at Rs 773.15 apiece, up 0.49 per cent, on the Bombay Stock Exchange.

Edited by Chitranjan Kumar