Tech Mahindra Q2 results: Profit falls 5% to Rs 1,065 crore; board declares special dividend

Tech Mahindra, a subsidiary of the Mahindra Group, on Friday reported 5.27 per cent year-on-year (YoY) decline in net profit at Rs 1,064.60 crore for the second quarter ended September 30, 2020, as against Rs 1,123.9 crore in the same period last year. On a quarter-on-quarter (QoQ) basis, the profit rose 9.5 per cent from Rs 972.3 crore in the June quarter of FY21. The company's board has declared a special dividend of Rs 15 per equity share on face value of Rs 5 per cent (300 per cent).

The Pune-headquartered company reported revenue from operations of Rs 9,371.80 crore as compared to Rs 9,069.9 crore in the September quarter of 2019, registering a year-on-year growth of 3.32 per cent. On QoQ basis, revenue was up 2.9 per cent from Rs 9,106.3 crore in Q1 FY20.

In dollar terms, Tech Mahindra's net profit was at $143.7 million, up 11.5 per cent QoQ, while revenue was up 4.8 per cent QoQ at $1,265.4 million during the September quarter of this fiscal over the June quarter, it said in a filing to the Bombay Stock Exchange.

Commenting on Q2 earnings, CP Gurnani, Managing Director and Chief Executive Officer, Tech Mahindra, said, "Our repair, rally and rise strategy has helped the company to emerge stronger, as we journey towards a post COVID world. We are witnessing demand revival across multiple segments, as customers have accelerated their pace of digital transformation. Our focus on creating Human Centered Experiences will enable us to capture increased spends on consumerisation, as businesses try to stay relevant in the current environment."

At the operating front, EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortisation) rose 30.9 per cent quarter-on-quarter to Rs 1,703 crore, while margin grew by 390 bps to 18.2 per cent.

Manoj Bhat, Chief Financial Officer, Tech Mahindra, said, "Strong execution on both revenue growth and operational metrics has helped to improve our performance on all fronts. Our cash conversion continues to be robust and we remain committed towards creating value for our shareholders through effective capital return."

During the quarter under review, Tech Mahindra's active client base stood at 988, while it added seven new clients during July-September period. The information technology services provider had 124,258 employees as of September 30, 2020, down by 5.5 per cent from 131,522 employees in the year ago period.

Ahead of Q2 results, shares of Tech Mahindra ended at Rs 848.10, up 1.19 per cent, against the previous closing price of Rs 838.10 on the BSE.

Also Read: Tech Mahindra Q1 profit rises 1% to Rs 972 crore, revenue up 5%

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