Tech Mahindra Q4FY23 PAT down -25.8% due to goodwill impairment charge

Tech Mahindra Ltd reported 13.22% growth in net revenues for the March 2023 quarter at Rs13,718 crore. The revenues were virtually flat on a sequential basis and the sequential pressure came from a slowdown in top line growth due to weak spending as well as pricing pressure in its core global markets. 

In terms of top line growth, Tech Mahindra saw strong growth across both its key segments viz. the IT business and the BPO business. However, if you look at the operating profit performance, there was a fall in the operating profits of the IT business due to pricing pressure while the BPO business saw operating profits moving higher.

Financial highlights for Mar-23 compared yoy and sequentially

Tech Mahindra

Rs in CroreMar-23Mar-22YOYDec-22QOQ
Total Income (Rs cr)₹ 13,718₹ 12,11613.22%₹ 13,735-0.12%
Operating Profit (Rs cr)₹ 2,021₹ 2,088-3.25%₹ 2,144-5.76%
Net Profit (Rs cr)₹ 1,118₹ 1,506-25.77%₹ 1,297-13.80%
      
Diluted EPS (Rs)₹ 12.62₹ 16.94 ₹ 14.64 
OPM14.73%17.24% 15.61% 
Net Margins8.15%12.43% 9.44% 

 

Net profits for the March 2023 quarter were lower by -25.77% at Rs1,118 crore on account of the Rs213 crore goodwill impairment as well a sharp spike in the employee costs of the company. Operating margins tapered sharply lower to 14.73% in the quarter while the net margins also fell to 8.15%.

In US dollar terms, revenues were up 10% in constant currency terms while the EBITDA was down -8%. EBITDA margins compressed 290 bps to 15.1% in the full year FY23. Even for the quarter, the EBTIDA margins at 14.7% were down 90 bps on a sequential basis. The total headcount at Tech Mahindra as of March was down to 152,400 personnel

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