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Tech Mahindra Beats Revenue Estimates Despite Profit Miss
16 Jan
Summary
- Tech Mahindra's third-quarter revenue rose 8.3% to 143.93 billion rupees.
- Communications and manufacturing segments fueled the revenue growth.
- A one-time charge impacted net profit, causing it to miss expectations.
Tech Mahindra reported its third-quarter financial results on Friday, revealing a revenue increase of 8.3% to 143.93 billion rupees for the period ending December 31. This figure exceeded the 141.58 billion rupees anticipated by analysts, driven primarily by robust performance in its communications and manufacturing segments. The communications division contributed significantly, with revenue up 4.7%, while the manufacturing sector saw an impressive 11.7% growth.
While revenue showed strength, the company's net profit for the quarter rose 14.1% to 11.22 billion rupees. However, this missed analyst expectations of 13.89 billion rupees. The shortfall is attributed to a one-time charge of 2.72 billion rupees incurred due to India's recently implemented labor codes. Despite this profit impact, Tech Mahindra's net new order bookings saw a substantial increase, reaching $1.1 billion compared to $745 million in the prior year.
The Mumbai-listed shares of the IT services provider closed 5.2% higher in anticipation of the results. This performance follows similar trends seen in larger IT peers like Tata Consultancy Services, Infosys, and HCLTech, which also reported higher revenues but missed profit estimates due to the impact of the new labor code provisions.
