Tech Mahindra Q2 Result: Net Profit Tanks 61 Per Cent To Rs 505 Crore; Revenue Dips 2 Per Cent

The board of Tech Mahindra has also announced an interim dividend of Rs 12 per share for FY23-24

Tech Mahindra logged a net employee addition of 2,307 sequentially for Q2, bucking the industry-wide trend of slowdown in hiring. ( Image Source :Getty )

Indian IT firm Tech Mahindra on Wednesday reported a 61 per cent drop in its consolidated net profit at Rs 505.3 crore in the second quarter ended September. The IT company had registered a net profit of Rs 1,299.2 crore in the same period a year ago, according to a regulatory filing.

The consolidated revenue from operations of the company declined by 2 per cent to Rs 12,864 crore during the reported quarter from Rs 13,129.5 crore in the year-ago period. On a QoQ basis revenue was down by 2.2 per cent. The company’s EBIT margin or operating margin came in at 4.7 per cent, which is worse than the previous quarter’s 6.8 per cent. 

The board of Tech Mahindra has also announced an interim dividend of Rs 12 per share for FY23-24. The deal total contract value (TCV) stood at $640 million, up from $349 million in the last quarter.

Tech Mahindra's Managing Director and Chief Executive Officer CP Gurnani said, “The year is being characterised by a challenging demand environment and prolonged macro uncertainties calling for a very tactical approach. We have doubled down our strategy of working closely with clients, helping them to streamline and modernize operations as they reprioritise their resources.”

The company's Chief Financial Officer Rohit Anand said, "We have taken actions to reduce the exposure to non-core areas of business. These actions will, over time, help us improve our financial performance and enable long-term sustainable growth. A consistent dividend payout reinforces our commitment towards creating value for our shareholders."

Shares of Tech Mahindra closed at Rs 1,141.70 on the BSE, down 13.45 per cent from the previous day.

Meanwhile, Tech Mahindra logged a net employee addition of 2,307 sequentially for the quarter ended September 30, bucking the industry-wide trend of slowdown in hiring and revenue guidance amid macroeconomic challenges and demand uncertainties. 

The total headcount for Q2 was 150,604. As of the first half of FY24, Tech Mahindra's total headcount had dropped by 1,796. The attrition rate dropped from 13 percent in Q1 to 11 per cent in Q2, continuing the trend of declining attrition rates since the start of fiscal year 2023.