Tech Mahindra results: Profit drops 6% to Rs 4,033 crore, revenue up 6% in FY20

Tech Mahindra, a subsidiary of the Mahindra Group, on Thursday reported 6.2 per cent decline in profit after tax (PAT) at Rs 4,033 crore for the financial year ended March 31, 2020, as compared to Rs 4,297.60 crore in the previous fiscal.

Consolidated revenue was up 6.1 per cent at Rs 36,868 crore in FY20 as compared to Rs 34,742.10 crore in FY19, Tech Mahindra said in a filing to the Bombay Stock Exchange.

In dollar terms, net profit was down 7.8 per cent year-on-year (YoY) at $566.8 million in FY20, while revenue jumped 4.3 per cent to $5,181.9 million.

During the financial year under review, EBITDA (Earnings before interest, tax, depreciation and amortisation) was down 9.6 per cent YoY at Rs 5,726 crore, while operating margins declined by 270 basis points (bps) to 15.5 per cent on yearly basis.

For the fourth quarter ended March 31, 2020, the IT major reported a 29 per cent YoY fall in consolidated profit at Rs 803.90 crore as compared to Rs 1,132.50 crore in the same period last year. Consolidated revenue rose 6.72 per cent to Rs 9,490.2 crore as against Rs 8,892.3 in the same quarter a year ago.

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Commenting on earnings, CP Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra, said,"COVID-19 has brought an unprecedented change in business model for the IT industry...While the demand traction seen through the first three quarters of Fiscal 19-20 has reversed in Q4, we expect that the focus on Digital Transformation, Remote Working, and Network Modernisation will recover in the medium term."

At the end of March 31, 2020, the company's active client base stood at 973, up by 35 per cent on YoY basis. It had 125,236 employees at the end of the fourth quarter.

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Tech Mahindra's board also recommended a final dividend of Rs 5 per share on par value of Rs 5 (100 per cent) for the financial year ended March 31, 2020, subject to approval by the members of the company at the forthcoming Annual General Meeting.

Ahead of earnings announcement, shares of Tech Mahindra closed Thursday's trade at Rs 546.10 apiece, up 3.26 per cent, against previous closing price of Rs 528.85 on the Bombay Stock Exchange.