Tech Mahindra Q4 Results: Revenue Up, But Salary Hikes Weigh On Margin
Tech Mahindra Ltd.’s revenue rose in the fourth quarter, aided by deal wins, but salary hikes and lower utilisation weighed on margin.
The technology services company’s revenue rose 5.81% sequentially to Rs 12,116.3 crore in the three months ended March, according to its exchange filing. That compares with the Rs 12,062.65-crore consensus estimates of analysts tracked by Bloomberg.
Its revenue rose 5.4% sequentially at constant currency.
Tech Mahindra Q4 Highlights (Consolidated, QoQ)
Net profit up 10.03% at Rs 1,505.7 crore, against Rs 1,419.71-crore forecast.
Ebitda rose 1.38% at Rs 2,088.4 crore , against estimated Rs 2,157.86 crore.
Ebitda margin stood at 17.24% compared with 17.99% as of December and 17.88% estimated.
Attrition remained flat at 24% in the Q4 on last twelve month basis.
Tech Mahindra won deals worth over $1 billion in the January-March period. That, according to Milind Kulkarni, chief financial officer, was a milestone achieved second time in the last two years. The total contract value of deals, according to him, crossed $3 billion in FY22.
The company’s total headcount stood at 1,51,173 as of March—4.2% higher than at the end of December.
Average salary hikes were 8-10% in FY22, said CP Gurnani, managing director and chief executive officer at Tech Mahindra. “We will not be issuing directives for working from office. A few clients, managers and officers, however, may decide on their level.”
Vivek Agarwal, president-BFSI, HLS and corporate development at Tech Mahindra, said total investment in M&A stood at $900 million in FY22. “We will be selective in new acquisitions and will be focused on integrating acquisitions, creating synergy and offer new services to clients in FY23.”
Tech Mahindra has appointed Rohit Anand as the new chief financial officer effective June 1. Kulkarni will retire after his two-decade long stint at the company.
Shares of Tech Mahindra closed 0.82% lower before the results were announced on Friday, compared with a 0.16% fall in the benchmark Nifty 50.