Tech Mahindra

Its net profit rise came as a pleasant surprise as no one really expected this. Despite revenue going down 2% (QoQ) to Rs.7336 crore, the company’s EBITDA was up 4% at Rs.935 crore, margins rose from 12% to 12.7% and it ended the quarter with a net profit of Rs.799 crore, up 36%. Clearly, it is the costs which have helped push up the bottomline despite the lower topline.

And it is – deferment of wage hikes and a spike up in other income helped beat estimates. Its other income during the quarter rose 72% at Rs.411 crore. Its total expenses were down 3%, with subcontracting expenses showing a 6% decline. Its depreciation and other expenses too came in low. It is these “cost rationalizations” which helped boost the bottomline.

Its active client list grew from 843 to 864; it added 21 new clients and repeat business got better from 93.5% to 97.2%.

The company reduced its headcount by 1713 and total employee strength is at 1,15,980; it plans to hire 2000 employees in current Q2 but in USA. Employee utilisation is at 77%. Atttrition rate is at 17% - remained stable.