Tech M Q2 net slides 4 pieces as profitability is under staff cost pressure. | Tech Rasta

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Tech Mahindra reported on Tuesday that earnings fell 4% for the September quarter at Rs.1,285 crore, citing compressed margins.

Total revenue of the country’s fifth largest IT services exporter rose 20.7% to Rs.13,129 crore for the reporting quarter compared to the same period last year and up 3.2% qoq. in june

Operating margin compressed to 15.1%, compared with 18.3% in the year-ago period. resulting in lower profits

Managing Director and Chief Executive Officer CP Gurnani told reporters the big deal pipeline was the best he had seen in the past five years. despite macroeconomic problems

Mahindra Group reported total contract value – value of new deal win – at $716 million for the reporting quarter. And management expressed satisfaction with the figure it said was within the target range of $700 million – $1 billion.

Rohit Anand, the company’s chief financial officer, said the major impact on profitability was due to higher costs in human resources. which companies In the IT sector, they are forced to hire with higher compensation or pay employee retention bonuses to retain experienced employees.

He said amortization costs due to multiple acquisitions in the past and investment in large deals were also affected. The company is looking for more leverage. Increasing the mix of offshore to low-cost geographic areas and numerous business initiatives, such as increasing the share of businesses from the US and Europe to increase the number

Gurnani said supply challenges continued in the reporting quarter. And it is expected that problems related to manpower will continue for up to a year.

He called Europe a caution due to geopolitical problems. high inflation power problem and how they will deal with the coming winter but added that demand in the United States still strong

Head of corporate development Vivek Agarwal said it had stepped up efforts to tap large deals with separate teams to find such deals, resulting in larger numbers. He also said the company could increase prices. got 0.5 percent during the quarter.

in human resources has added more than 5,000 on a net basis To bring its overall workforce base to more than 1.63 lakh people, Agarwal said the company provided average 6-10 percent salary increases during the quarter. As a result, the operating profit margin is 1%.

Attrition dropped to 19.6% in the quarter from 21% in the previous quarter. and remains at the upper edge of the budget level. Kurnani said and added that it was in decline

Asked about his goal of hiring 10,000 new employees in FY23 and the progress in the first half, Gurnani replied without revealing the numbers. And said all IT players were working to measure response from the business side before hiring. However, he made it clear that the company would not hesitate to join after submitting an offer.

Tech Mahindra shares closed down 0.77%, up at Rs 1,071.65 per piece on BSE, compared to a gain of 0.62% on the benchmark.

(This story is not edited by Devdiscourse staff and is automatically generated from a curated feed.)

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