Tech Mahindra reported strong earnings beat in its Apr-June quarter and clocked in highest ever quarterly revenue and profits in a seasonally weak June quarter. June quarter is seasonally weak due to Comviva seasonality; however the IT firm posted revenue growth of 3.9% QOQ in constant currency terms (CC terms) with Communication vertical growing at 2.9% QOQ in CC and Enterprise vertical up 4.5% QOQ in CC.
EBIT margin came in at 15.2% versus. 16.5% in the last quarter, the decline was lower than expectations. $revenue stood at USD 1384mn (up 4.1% QOQ) and Profits stood at Rs 1353 crore (up 25.1% QOQ).
Growth has been broad based across verticals, industries and geographies. Revenue by geographies: America up 6.8% QOQ, Europe up 6.6% QOQ, Rest of the world at -2.7%. Net new deals wins were strong at USD 815 mn, the run rate has been better than the past quarterly average run rate. The firm added 1 client in $ 50 M + bucket.
Attrition rate however has been highest within the top 5 Indian IT firms at 17% and the company has added 5209 employees during the quarter taking the headcount to 126263 as of June 2021.
CP Gurnani, MD and CEO, Tech Mahindra said, “We have witnessed an all rounded performance this quarter with growth across our key markets and industry sectors. We continue to see strong traction in large deal wins as we are helping our customers in integrated digital transformation. Our focus on key technology pillars wrapped around experience-led approach with TechM Nxt.Now will help us to capitalize on the strong demand momentum.”
Speaking exclusive to ET NOW, Gurnani said, the company has reported a Stellar Q1 performance, but more important is the demand and pipeline is stronger than ever before. Backlog of large deals and overall business momentum is one of the best. Essentially technology sector has reported highest growth. BFSI continues to be strong, Healthcare sector is strong in US and Manufacturing is back on the growth path.
Gurnani said, demand is broad based, 5G investments are now paying off. Autos, Industrials, Mining sectors are showing buoyancy. I feel confident about double digit growth trajectory given our investments, overall demand and economic outlook.
TECH MAHINDRA Q1FY22 REVIEW:
- Revenue growth at 3.9% QoQ in CC terms
- Revenue at $ 1,384 mn vs $ 1,329 mn up 4.1% QoQ
- Revenue at Rs 10,198 cr vs Rs 9,729 cr, up 4.8% QoQ
- EBIT at Rs 1545 cr vs Rs 1604 cr QoQ
- EBIT margin at 15.2% vs 16.5% QoQ
- PAT at Rs 1,353 cr vs Rs 1,081 cr, up 25.1% QoQ
- Net new deals wins at USD 815 mn
