TechM Q2 results: Profit may plunge up to 50%; deal wins, outlook likely to stay weak

Tech Mahindra Ltd (TechM) is expected to report up to 52 per cent plunge in year-on-year (YoY) net profit for the September quarter on a muted revenue growth. Margin may be impacted due to wage hikes and one-time impacts.  

Emkay Global expects TechM to report a 25.6 per cent per cent year-on-year (YoY) drop in net profit at Rs 974.90 crore for the September quarter. It sees dollar revenues at $1,593 million, down 0.5 per cent sequentially. In constant currency (CC) terms, revenue is seen falling 0.6 per cent QoQ. 

Nuvama Institutional Equities said TechM may report 0.7 per cent QoQ decline in CC revenue and 0.9 per cent drop in dollar revenues, driven by weakness in Telecom segment and weak deal flow in earlier quarters. 

Margins, it said, are likely to decline further by 100 basis points QoQ on the back of various business restructuring actions. Deal wins are anticipated to be weak YoY as is the overall outlook, the brokerage said.

Nuvama sees profit at Rs 667 crore, down 48 per cent YoY. It sees sales at 13,119.60 crore, down 0.1 per cent. Ebit margin is seen at 5.7 per cent. 

HDFC Institutional Equities expects profit to come in at Rs 624 crore, down 51.50 per cent YoY. It sees sales for the quarter at Rs 13,090 crore, down 0.3 per cent. Ths brokerage sees Ebit margin at 6 per cent.

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