Massive forex gains boost TechM net almost 30%

Fifth largest software exporter Tech Mahindra today reported a 29.7 per cent jump in September quarter net at Rs 836 crore, driven primarily by massive currency gains.
Bottom line was driven majorly by a hefty 132 per cent increase in other income at Rs 322 crore from Rs 138 crore in the year-ago period, as its revenue rose only a tepid 6.1 per cent to Rs 7,606 crore.
Pretax profit margin also narrowed to 14.5 per cent from 14.9 per cent a year ago, but improved on a sequential basis when it was at a low 12.7 per cent, the company said.

Chief financial officer Milind Kulkarni attributed the growth in other income to forex gains, which grew to Rs 95.3 crore from Rs 51.1 crore in the year-ago quarter.
The company added 1,250 employees during the quarter and the utilisation rate moved up to 81 per cent.
Kulkarni said sequentially, the company was able to expand margins on better utilisation and efficiencies, while the favourable movement in currencies helped it expand the gap by 0.20 per cent.

Geographically, revenue from the US, its largest market, was flat which led to the overall share of the Americas' pie dipping to 45.3 per cent from 48.3 per cent in the year-ago period.

Managing director and chief executive C P Gurnani said sluggishness in the US was due to operational reasons and cannot be attributed to any geopolitical factors. Non- application for H1-B visas also helped the margins, he said.
The company is targeting to improve the share of the new age digital revenue to up to 50 per cent, Gurnani said without giving a timeline or also spelling out the current contribution.
In pursuit of the same, it has invested USD 35 million for an open-source artificial intelligence platform, which was shown as an advance in the books, Gurnani said.
He said the company is focusing majorly on re-skilling and is targeting to train 10,000 employees in the new technologies like machine learning, artificial intelligence and automation.

Executive vice-chairman Vineet Nayyar expressed satisfaction at the progress the company has made and added that it is on the right path on both growth and profitability.
TechM scrip closed 1.59 per cent up at Rs 489 on the BSE whose benchmark Sensex rallied 1.17 per cent gains to hit a new lifetime high.