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Tech Mahindra’s second quarter net profit drops 4% to ₹1,285 crore

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  • Revenue for the quarter grew 20.7% year-over-year to 13,129 crore compared to ₹10,881 crore in the corresponding quarter last year. Consecutively, turnover grew by 3.3%.
  • The company’s board of directors also announced a special dividend of 18 per share.
  • On the upside, attrition for Tech Mahindra has consistently improved to 20% in Q2 FY23, from 22% in Q1 FY23 and 24% in Q4 FY22.

India’s sixth largest IT services company, Tech Mahindra, today reported a 4% decline in consolidated net profit for the quarter to 1,285 crore in the second quarter, from ₹1,338 crore in the same quarter last year. Net profit grew successively by 13.6%.

In constant currency (CC), revenues grew sequentially by almost 2.9% and in dollar terms by 0.3%. Revenue for the quarter grew 20.7% year-on-year to 13,129 crore.

The company’s board of directors also announced a special dividend of 18 per share. The company’s total workforce was 163,912, an increase of 3.7% sequentially. Investors are keeping a close eye on the expansion of the workforce, an increase is positive.

“We continue to focus on resilience and flexibility to ensure long-term value for our people, customers, partners and society at large. As market conditions evolve and supply-side challenges persist, we will strengthen our differentiated offering to helping customers in their transformation journey through our integrated and new-age solutions,” said CP Gurnani, MD & CEO at Tech Mahindra.

Particularities Q2 FY23 Q1 FY23 Q2 FY22
Revenue ₹13,129 crore ₹12,707 crore ₹10,881 crore
Net profit ₹1,285 crores ₹1,131 crore ₹1,338 crore
Margin 14.8% 17.2% 18.4%

Rohit Anand, the chief financial officer at Tech Mahindra, said they have taken several measures to achieve operational efficiencies and ensure long-term sustainable growth.

“As we continue to address dynamic market conditions, we will continue to focus on creating value for our stakeholders through continued operational rigor, robust cash flow generation and prudent capital allocation,” he added.

Tech Mahindra has the lowest turnover in the top 5 companies
On the plus side, Tech Mahindra’s churn has been constantly improving. The company ended the quarter with a 20% churn from 22% in the first quarter and 24% in Q4 FY22. If the company can keep up with its forecasts, it could drop to 18% in the next two quarters.

Tech Mahindra’s churn is still better than Infosys’ which is 27.1% and TCS’s is 21.5%.

Top 5 IT Companies Dropout rate in Q2 FY23
TCS 21.5%
infosys 27.1%
HCL technologies 23.8%
wipro 23%
Tech Mahindra 20%

On a consolidated basis, Tech Mahindra’s expenses increased 27% year-on-year and 5.3% sequentially in the September quarter to ₹6,895 crore.

Employee benefits costs Quantity
Q2 FY23 ₹6,895 crore
Q1 FY22 ₹6,550 crore
Q2 FY22 ₹5,416 crore


The company also said it signed a deal during the quarter with one of the world’s largest growing ERP solutions companies to provide digital product engineering, support and consulting services. Tech Mahindra also won a multi-year strategic deal with one of the world’s leading US game software developers to scale up their content moderation business.

It was also chosen by one of the largest providers of omnichannel solutions in Europe, for a multi-year deal.

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