Tech Mahindra

The company, on Monday issued a profit warning w.r.t its Q1FY16 numbers. It said that its revenue and profit margin may witness a sequential decline in the first quarter of FY15 due to higher US visa sponsorship costs for its employees.

This came a big blow as the market was as such hugely disappointed with the Q4FY15 performance of Tech Mahindra. Its consolidated net profit for the quarter came in at Rs.472 crore, down by a big 41% (QoQ) though total income was up 6% at Rs.6117 crore. What pushed down the bottomline were – forex loss of Rs.154 crore and a 23% rise in employee benefit expense at Rs.3256 crore, which is almost 50% of the total income earned. Consequently, EBIT came in 25% down at Rs.756 crore and margins slipped from 17.7% to 12.4%.

The Q4 performance was affected due to slow decision making in some projects, volatile oil prices, uncertainty in US, slow demand and cross currency impact – mainly due to volatility in currencies of Australia, Euro and Canada.

The company ended FY14 with a 20% rise in consolidated revenue at Rs.22,621 crore and net profit was at Rs.2628 crore, down 13%. Total headcount as of March 31, 2015 at 103,281, adding13,840 professionals during the year. Debt was at Rs.700 crore and cash and cash equivalent at Rs.3212 crore. Active Client count stood at 767 vs.629 in FY14.