IT firm Tech Mahindra reported weak Q1FY24 numbers as expected, with a decline in both profit and EBITDA. Although revenue showed a modest YoY growth, it faced significant headwinds, impacting profitability. Despite the challenging quarter, the company remains confident in delivering long-term value to its customers and shareholders.
During Q1FY24, Tech Mahindra’s revenue fell 4.1% QoQ but rose 3.5% YoY to ₹13,159 crore. The company’s consolidated PAT for the quarter was ₹693 crore, representing a 38% decline QoQ and 38.8% YoY.
EBITDA for Q1FY24 stood at ₹1,338 crore, showing a decline of 33.8% QoQ and 28.8% YoY. Earnings per share (EPS) were at ₹7.82.
Tech Mahindra highlighted that it secured a net new deal worth $359 million during Q1FY24, compared to $802 million in the same quarter last year and $592 million in Q4FY23.
The company witnessed a decrease in its total headcount both on a yearly and quarterly basis. As of June 30, 2023, the total headcount was 1,48,297, down 6.2% YoY and 2.7% QoQ.
When it comes to segments, the CME (communications, media, and entertainment) segment exhibited a poor performance, experiencing an 8.2% YoY and 9.4% QoQ revenue decline. The BFSI (banking, financial services, and insurance) segment saw a 5.4% YoY and 3.2% QoQ revenue decline, while the retail, transport, and logistics segment faced a 2% YoY and 0.3% QoQ revenue decline.
There is a silver-lining. On a positive note, the manufacturing segment’s revenue rose by 8.6% YoY and 1.8% QoQ. Similarly, the technology segment witnessed an 8% YoY and 0.1% QoQ rise in revenue.
In terms of geographical performance, except for the Americas, both Europe and ‘rest of the world’ saw declining revenues. Revenue in the Americas rose by 1.4% YoY but declined by 0.5% QoQ. Europe revenue fell by 5.4% YoY and 6.7% QoQ. The ‘rest of the world’ market segment also experienced a decline, with revenue falling by 5.2% YoY and 8.2% QoQ.
The stock has seen significant drop. The shares are trading 4.40% lower at Rs.1092.90 apiece on Thursday.