India's Tech Mahindra posts 26% slide in Q4 profit as clients cut spending
BENGALURU (Reuters) -India's Tech Mahindra reported a 25.8% slump in fourth-quarter profit on Thursday, hurt by rising expenses and challenging macroeconomic conditions that prompted clients to tighten spending.
Consolidated net profit for the information technology services firm fell to 11.18 billion rupees ($136.7 million) for the quarter ended March 31, missing analysts' expectations of 13.20 billion rupees.
The Pune-based company's new deal wins for the quarter nearly halved to $592 million from $1.01 billion a year earlier.
Indian IT companies draw a bulk of their revenue from the United States and Europe, which are staring at a recession amid turbulence in the banking industry.
India's top two IT exporters, Tata Consultancy Services Ltd and Infosys Ltd, posted weaker-than-expected quarterly numbers, with both companies flagging a slowdown in the telecom and communication segment as clients contemplate spending cuts and project rampdowns to save cash.
Communication, media, and entertainment segment, a key vertical for Tech Mahindra, now accounts for 40.1% of the total revenue, down from 40.6% a year earlier.
Consolidated revenue from operations came at 137.18 billion rupees compared with 121.16 billion rupees a year earlier. The company's expenses rose 18.2% to 124.94 billion rupees.
Tech Mahindra shares closed up 0.69% on Thursday. The stock was down 1.3% year to date against the Nifty IT's 4.4% fall.
($1 = 81.8100 Indian rupees)
(Reporting by Nishit Navin in Bengaluru; Editing by Sohini Goswami)