Tech Mahindra (TechM), the information technology arm of the Mahindra and Mahindra Group, has joined the ‘billion dollar club’. It reported revenue of Rs 5,140.2 crore ($1.1 billion) for 2010-11.
With this, the two software arms of the M&M group — Tech Mahindra and Mahindra Satyam — will generate a combined revenue of $2.2 billion as of March 31. Mahindra Satyam, reported a full year (ending March 31) revenue of $1.12 billion.
However, TechM’s fourth quarter results ended March 31, were impacted due to losses worth Rs 114.4 crore related to Mahindra Satyam. Net profit for the quarter was down 59 per cent at Rs 92 crore from Rs 227 crore in the same quarter in 2009-10. Net profit excluding these losses was Rs 206.5 crore, down nine per cent on a year-on-year basis and up 0.5 per cent on a sequential basis.
Revenue for the quarter at Rs 1,261.5 crore was up 6.6 per cent from Rs 1,183 crore in the corresponding quarter the year before. For the full year, revenue grew 11.1 per cent from Rs 4,625.4 crore last year. Net profit for the year at Rs 644 crore was down eight per cent from Rs 700.4 crore.
Declining business from BT of Britain, a top client, also impacted business growth. Excluding BT, the company witnessed revenue growth of 27 per cent for the full year and nine per cent on a sequential basis. BT’s contribution to revenues for the quarter was 41 per cent down from 44 per cent last quarter.
“BT is a very important client for us. The demand for BT is stable. As the company has taken a decision to maintain its IT spend at a certain level, we expect BT to contribute around £70-72 million on a quarterly basis,” said Vineet Nayyar, vice chairman, MD and CEO of TechM.
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He was hopeful that 2011-12 would be a better year, with the telecom industry seeing recovery. Growth, he said, would come from emerging markets such as Australia, Africa and West Asia. Nayyar also added that a merger with Mahindra Satyam would be completed in a year.
“Emerging markets have continued to do well. We have established a base in Africa and hired close to 2,000 employees in seven countries. We also won two significant deals in the region,” he added.
Pricing, said the company, would be stable, with an upward bias. "I do not think we will get a price increase from all the clients. In the case of BT, the deals were renegotiated," said Sonjoy Anand, Chief Financial Officer.
TechM added 4,809 personnel during the year, taking total headcount to 38,333.
The software professional headcount was 26,282, that in business process outsorucing was 11,011 and support staff was 1,040.