Tech Mahindra Q2 profit seen falling 18% to Rs 277 crore

Tech Mahindra Q2 profit seen falling 18% to Rs 277 crore

Tech Mahindra, which provides software services to clients such as BT Group Plc and Cisco, will report fiscal second quarter earnings later today. Sales are likely to rise 5 per cent sequentially though net profit may slip 18 per cent in the September quarter against June quarter, according to a brokers' poll by NDTV.

Shares in Tech Mahindra, valued at over Rs 12,000 crore or $2 billion, traded 0.7 per cent higher at Rs 957.90 at 10.40 a.m., while the broader BSE IT index was down 0.1 per cent.

July - September sales are seen rising to Rs 1,621 crore from Rs 1,543 crore in the June quarter. Sales in US dollar terms are estimated to rise 3.9 per cent to $292 million from $281 million in the previous quarter.

Net profit may decline to Rs 277 crore against Rs 338 crore in the previous quarter. Core margins may decline by 180 basis points to 19.6 per cent from 21.4 per cent in the June quarter on account of acquisitions and wage hikes. The company is likely to report forex loss of Rs 63 crore.

Tech Mahindra's promoter Anand Mahindra purchased Satyam in a government-sponsored sale in 2009 after the founder of the Hyderabad-based company admitted to one of India's largest accounting frauds. Mr Mahindra is seeking to create a consolidated IT services powerhouse by merging Satyam and Tech Mahindra. Tech Mahindra owns close to 43 per cent of Satyam, now called Mahindra Satyam. It is offering one share in itself for every 8.5 shares of Satyam to absorb the company.



(With inputs from Reuters)