MUMBAI: Fifth biggest IT company by revenues Tech Mahindra on Thursday reported a 34.69 per cent decline in its March quarter net at Rs 1,117.8 crore due to narrowing profit margins.
For the entire fiscal, its profit after tax came down to Rs 4,831.5 crore as against Rs 5,566 crore in FY22.
Its overall revenue grew by over 13 per cent to Rs 13,718 crore in the reporting quarter, and almost flat when compared to the preceding December quarter.
Its total contract value nearly halved to USD 592 million as against 1.011 billion in the year-ago period, and was lower than the USD 795 million in new deal wins in the preceding December quarter.
A slew of its peers, who have reported numbers for the March quarter, are speaking about macroeconomic volatilities in the largest market of the US impacting their business as clients defer their IT spends.
The Mahindra group company hopes that there can be a resurgence in IT spends and all the investments which it has done will come in handy, its chief executive C P Gurnani told reporters.
He admitted that the geopolitical scenario and war have pushed it into a difficult situation, but its experience of the past crisis has taught it to never waste a crisis.
Countries rich in minerals, commodities and energy, along with the ones possessing large consumer bases, will be driving the future spends in technology, and the company is pivoting to tap into the potential, he said.
Its chief financial officer Rohit Anand said the rising wage inflation due to the supply side challenges was the primary reason limiting the operating profit margin at 11.2 per net as against 13.2 per cent in the year-ago period and 12 per cent in the preceding quarter.
The company did benefit on the margin front through a one per cent jump in its pricing power and a reduction in sub-contracting costs, and will continue to deploy the same to help the business going forward as well.
It reduced its workforce by over 4,600 employees during the quarter to get the overall staff strength to just above 1.50 lakh, which Anand attributed to a phase of consolidation.
Gurnani said going forward, the company will look at monetising its patents better and added that there is a larger scope for revenues by serving companies in the Mahindra Group itself.
He also said that the overall deal pipeline is strong.
Its board on Thursday recommended a final dividend of Rs 32 per share.
The company scrip closed 0.80 per cent up at Rs 1,004.20 a piece on the BSE, as against gains of 0.58 per cent on the benchmark.