TechM profit drops in worst quarter in 5 yrs

livemint.com:

Tech Mahindra, the last of the six large-cap companies in the domestic information technology (IT) services industry to announce earnings this quarter, posted a staggering 62% drop in net profit in the September quarter, rounding off what was one of the worst quarters for this industry in the past five years, barring the covid-disrupted period. Its revenues for the period were at $1.55 billion, down 2.8% sequentially in constant currency terms, while net profit fell 29.3% sequentially, and a whopping 62.5% from a year earlier to $59.5 million. Tech Mahindra’s operating margin fell 2.1 percentage points sequentially to 4.7%, one of its lowest in recent memory.

The firm failed to meet Street expectations with its September quarter earnings, which were weaker than its peers through this fiscal. An average of 29 analysts polled by Bloomberg expected its revenue to be at $1.59 billion during the quarter, while net profit, according to 26 analysts polled by Bloomberg, was expected to be at $96.1 million, but was lower by over one third of the expected profitability. This was one of the weakest quarterly performances in the company’s history, amid significant changes in its top management.

Long-standing chief executive officer and IT industry veteran C.P. Gurnani is expected to retire and hand over the reins to Mohit Joshi, who had a 22-year stint and was one of the two presidents at Infosys. Joshi’s former colleague at Infosys, Atul Soneja, also joined Tech Mahindra as the chief operating officer on 7 August.