Tech Mahindra share falls over 4% on Q2 earnings

Tech Mahindra share price fell over 4% today after the IT major reported a 5.27 per cent decline in September quarter net profit. Share price of Tech Mahindra touched an intraday low of Rs 813.95 down 4.03% on BSE. The stock closed 3.38% lower at Rs 819.

Total 2.60 lakh shares of Tech Mahindra changed hands amounting to turnover of Rs 21.66 crore. Tech Mahindra share stood higher than 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages. The stock has gained 7.45% since the beginning of this year and risen 13.75% during last one year.

Net profit in Q2 fell to Rs 1,064.6 crore, even as profit margins widened sharply.

Revenue of the Mahindra Group company rose 3.32 per cent over last year and 2.32 per cent over the preceding June quarter to Rs 9,371 crore. The operating margin improved sequentially by over 4 percentage points to 14.2 per cent.

Other income fell to Rs 117.5 crore from the year-ago period's Rs 216.3 crore on the back of a Rs 35.6 crore loss booked on foreign exchange as against gains of Rs 49.6 crore in the year-ago period. Managing Director and Chief Executive C P Gurnani said the company is happy with the results and attributed the show to a re-purposing exercise undertaken in the face of the COVID-19 pandemic.

Share of revenue from the largest market , the US, which is imposing greater restrictions on Indian IT companies on the visa front, declined to 48.4 per cent as against 49.3 per cent in June quarter.

From a business outlook perspective, Bhat said the deal funnel is "very robust" with new wins going back to pre-pandemic levels, while Gurnani said the focus on 5G, cloud and artificial intelligence is working out well for the company.

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