Tech Mahindra profit dips 5% to ₹1,146 cr.

Firm’s revenue, however, rises 8% to ₹9,655 crore

Information technology (IT) firm Tech Mahindra reported a 5% dip in its third quarter net profit to ₹1,146 crore as the cost of services increased during the quarter.

The fall in profit was reported despite an 8% increase in revenue to ₹9,655 crore.

The cost of services rose 12% to ₹6,731 crore.

C.P. Gurnani, MD & CEO, Tech Mahindra, said, “This has been a quarter of strong growth across our communications and enterprise businesses. We continue to win marquee deals and are well poised to capitalise on new market opportunities with technology shifts like 5G, which continues to be a key focus area in the year ahead.”

The company recorded an operating profit, or EBITDA, of ₹1,563 crore, down 9.2%. EBITDA margin was 16.2%, down 310 basis points, against 19.3% in the corresponding quarter last year.

Manoj Bhat, chief financial officer, Tech Mahindra, said, “We have witnessed substantial operational and financial metrics improvement with a healthy cash flow generation this quarter. We continue to invest in emerging technologies and streamline delivery as we ready ourselves for the next phase of growth.”

During the quarter, Tech Mahindra announced the acquisition of a 70% stake in Bengaluru- headquartered Cerium Systems. Cerium will boost the company’s engineering services practice in VLSi (very large scale integration) and embedded software.

Tech Mahindra shares on BSE closed up 0.5% to ₹795.4 in a weak Mumbai market on Friday, valuing the company at ₹76,791 crore.