Tech Mahindra divests 73.38% stake in subsidiary FixStream Networks to US-based company for $2 million

Tech Mahindra, the country's leading software services company Sunday announced the divestment of 73.38% stake in its subsidiary FixStream Networks Inc to US-based Resolve Systems LLC for an amount of $2 million (approx Rs 14.22 crore).

"In terms of the authority delegated by the Board of Directors we wish to inform divestment of 73.38 per cent equity investment held by the company in FixStream Networks Inc, USA, a subsidiary company," Tech Mahindra said in a BSE filing.

The Software major said that the amount received from the said divestment in its subsidiary is $2 million for the equity held by the company, subject to necessary adjustments.

Also Read: Tech Mahindra Q1 profit rises 7% to Rs 959 crore, revenue up 4.6%

Tech Mahindra said FixStream Networks Inc reported a revenue of $5.15 million and a loss of $5.19 million in 2018-19.

Meanwhile, Tech Mahindra in July reported 6.8 per cent year-on-year (YoY) rise in consolidated net profit at Rs 959.30 crore for the first quarter ended June 30.

The profit was down 15 per cent compared to Rs 1,132.50 crore in the March quarter.

Consolidated revenue from operations increased by 4.6 per cent to Rs 8,653 crore in Q1FY20 as compared to Rs 8,276.30 crore in Q1FY19. However, Tech Mahindra's revenue was lower than Rs 8,892.30 crore in the March quarter.

During the quarter under review, EBITDA (Earnings before interest, tax, depreciation and amortisation) fell 3.2 per cent YoY to Rs 1,314 crore, while operating margins dropped 120 basis points (bps) to 15.2 per cent on yearly basis.

Also Read: Tech Mahindra goes green! Deploys e-Verito sedans to ferry employees at Hyderabad campus

Basic earnings per share (EPS) stood at Rs 8.50 as against Rs 9.27 in the corresponding quarter of last fiscal.

In US dollar terms, consolidated profit climbed 5.2 per cent YoY to 138.7 million, while revenue rose 1.9 per cent YoY to 1,247.1 million.

As of June 30, 2019, the company total headcount stood at 125,773, up 4,691 on the quarter-on-quarter basis.

The company, in a separate filing, said that its board has approved the proposal to acquire a majority stake in Mad Power Media Solutions, LLC through its wholly-owned subsidiary, Tech Mahindra (Americas), Inc.

Also Read: 2019 will be the year of growth for Indian IT, says Tech Mahindra MD CP Gurnani