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IT firm Tech Mahindra Q1 net halves

IT firm Tech Mahindra today reported 49.08 per cent plunge in net profit at Rs 131.62 crore for the quarter ended June 30, 2009 owing to the interest costs on borrowings the company incurred after acquiring Satyam.

The IT firm, which recently acquired a controlling stake in Mahindra Satyam, had a net profit of Rs 258.52 crore in the June quarter of last fiscal, Tech Mahindra said in a filing to the Bombay Stock Exchange.

Total income fell 5 per cent to Rs 1,086.88 crore during third quarter, from Rs 1,142.50 crore in the year-ago period.

On a quarter-on quarter basis, the company’s net profit dropped 43 per cent from Rs 230.40 crore in the March quarter of FY’09.

“This decline in net profit was primarily due to interest costs on borrowings post the Satyam acquisition,” it said.

As of June 30, 2009, the company’s debt stood at Rs 2,380.2 crore, the filing said.

“This has been a momentous quarter which has redefined Tech Mahindra’s positioning in the market place. Not only has our leadership position in telecom been reinforced, but our presence has expanded across other industry verticals as well,” Tech Mahindra Vice-Chairman Vineet Nayyar said.

Tech Mahindra consolidated headcount increased by 510 employees to 25,482 at the end of June.

On a standalone basis, Tech Mahindra reported a 47 per cent decline in net profit at Rs 134.70 crore for the quarter ended June 30, 2009. It had a net profit of Rs 254.36 crore in the June quarter of FY’09.

Standalone total income dipped to Rs 1,030.30 crore during the June quarter, down 8.47 per cent from Rs 1,125.73 crore in the year-ago period.

Tech Mahindra, which acquired 42.7 per cent stake in Mahindra Satyam earlier this month, also said the reported consolidated numbers do not include Mahindra Satyam’s (earlier Satyam Computer Services) financials as those are being prepared for restatement.

Shares of Tech Mahindra closed at Rs 770.15, down 5.07 per cent on the BSE.

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