Tech Mahindra net profit soars 90% to Rs 897 cr on margin surge, forex gains
While its total revenues grew to Rs 6,883 crore from Rs 6,116 crore a year ago, its pre-tax profit margin expanded to 17 per cent from 15.4 per cent, lifting the bottom-line for the reporting period.
- May 25, 2016,
- Updated May 25, 2016 10:14 AM IST
Fifth-largest software exporter Tech Mahindra has reported a 90 per cent rise in post-tax profit for the three months to March at Rs 897 crore on wider margins from an expanded revenue base, forex gains and lower tax payout.
While its total revenues grew to Rs 6,883 crore from Rs 6,116 crore a year ago, its pre-tax profit margin expanded to 17 per cent from 15.4 per cent, lifting the bottom-line for the reporting period.
For the full year ending March, the company's net income rose 18.7 per cent to Rs 3,118 crore, while revenue was up 17.1 per cent to Rs 26,494 crore.
Chief financial officer Milind Kulkarni explained that the profit margins were pulled down by two acquisitions done in 2014-15, and the turnaround in the acquired companies has helped it post good numbers in the reporting period.
Citing Comviva, which it had acquired in 2012 for Rs 260 crore and performed exceptionally good in the reporting period, chief executive and managing director CP Gurnani said Tech Mahindra has repeatedly shown its capacity to turn around businesses acquired at lower valuations.
The company is currently working to lift the performance of its US-based Lighthouse Communications acquired in 2014 for $240 million and shed 20 per cent of the business which was not profitable enough, Gurnani said.
Gurunani said it will take another four quarters for the company to turnaround, while Kulkarni said TechM's ultimate target is to take the profit margin from low-single digit to double-digits for this company. This US company underwent an organisational restructuring exercise wherein Manish Vyas has been appointed as the chief executive of the business.
For the March quarter, Tech Mahindra reported a forex gain of $9 million as against a loss of $1.5 million in the year ago period which helped lift up the bottom-line, Kulkarni said. The provision for taxes also came down to Rs 157.1 crore from Rs 184.5 crore as the effective tax rate declined to 21 per cent, he said, adding it will go up to 23 per cent going forward.
Fifth-largest software exporter Tech Mahindra has reported a 90 per cent rise in post-tax profit for the three months to March at Rs 897 crore on wider margins from an expanded revenue base, forex gains and lower tax payout.
While its total revenues grew to Rs 6,883 crore from Rs 6,116 crore a year ago, its pre-tax profit margin expanded to 17 per cent from 15.4 per cent, lifting the bottom-line for the reporting period.
For the full year ending March, the company's net income rose 18.7 per cent to Rs 3,118 crore, while revenue was up 17.1 per cent to Rs 26,494 crore.
Chief financial officer Milind Kulkarni explained that the profit margins were pulled down by two acquisitions done in 2014-15, and the turnaround in the acquired companies has helped it post good numbers in the reporting period.
Citing Comviva, which it had acquired in 2012 for Rs 260 crore and performed exceptionally good in the reporting period, chief executive and managing director CP Gurnani said Tech Mahindra has repeatedly shown its capacity to turn around businesses acquired at lower valuations.
The company is currently working to lift the performance of its US-based Lighthouse Communications acquired in 2014 for $240 million and shed 20 per cent of the business which was not profitable enough, Gurnani said.
Gurunani said it will take another four quarters for the company to turnaround, while Kulkarni said TechM's ultimate target is to take the profit margin from low-single digit to double-digits for this company. This US company underwent an organisational restructuring exercise wherein Manish Vyas has been appointed as the chief executive of the business.
For the March quarter, Tech Mahindra reported a forex gain of $9 million as against a loss of $1.5 million in the year ago period which helped lift up the bottom-line, Kulkarni said. The provision for taxes also came down to Rs 157.1 crore from Rs 184.5 crore as the effective tax rate declined to 21 per cent, he said, adding it will go up to 23 per cent going forward.