Tech Mahindra’s net profit for the third quarter ended December was up 0.9% sequentially to `1,297 crore, below the consensus Bloomberg estimates of `1,322.40 crore. However, net profit declined 5.3% year-on-year due to high inflation and cost impact due to supply side pressures.
The company’s revenues for the December quarter rose 4.6% sequentially to `13,735 crore, beating the consensus Bloomberg estimates of `13,488.70 crore.
The dollar revenue grew 8.8% annually and 1.8% sequentially in constant currency to $1.67 billion on the back of net new deal wins of $795 million around cloud engineering in verticals like telecom and healthcare.
“We are witnessing moderation in growth given the tough macroeconomic environment. We will continue to work with our customers to pre-empt their technological requirements and identify new demand drivers, especially for digital services,” said CP Gurnani, CEO and managing director, Tech Mahindra.
Gurnani said during the earnings call that the overall environment is “reasonably dynamic” and the macros are not uniform across key geographies like the US and Europe. He added that there is a slowdown in decision-making by the clients due to the macroeconomic uncertainties.
Tech Mahindra’s Ebit margins for the December quarter expanded to 12% from 11.4% in the preceding three months, but narrowed from 14.8% in the year-ago period.
The attrition rate moderated to 17% from 20% in the preceding three months, indicating supply side pressures are gradually coming down. The management said Tech Mahindra would be “agile” and “do whatever is needed” to improve on an operational basis. Tech Mahindra’s total headcount as of the December quarter stood at 157,068 employees.
Tech Mahindra declared its earnings after markets hours on Monday. Ahead of the results, shares of the company closed up 0.58% at `1,036.15 on the BSE.