Margin decline temporary, says Tech Mahindra's Gurnani after Q4 disappointment
In an interview with CNBC-TV18, CP Gurnani, MD and CEO of Tech Mahindra said that the decline in margins was temporary and that the company expects to see an upward tick in margins soon. He also mentioned that despite the current economic situation, Tech Mahindra would continue to invest in the business to drive growth.
Tech Mahindra reported earnings for the January to March 2023 quarter on April 27 with an EBIT (earnings before interest and taxes) margin decline to 9.6 percent, the lowest in 23 quarters. Analysts polled by CNBC-TV18 had predicted the figure to come in at 12 percent. EBIT was recorded at Rs 1,317.8 crore versus the estimate of Rs 1,648 crore.
The tech services company recorded a net profit of Rs 1,117 crore, lower than the CNBC-TV18 poll expectation of Rs 1,275 crore. The IT giant’s net profit has dropped 13.8 percent from Rs 1,296.6 crore in the October to December 2022 quarter.
In an interview with CNBC-TV18, CP Gurnani, MD and CEO of Tech Mahindra said that the decline in margins was temporary and that the company expects to see an upward tick in margins soon. He also mentioned that despite the current economic situation, Tech Mahindra would continue to invest in the business to drive growth.
Also Read | Tech Mahindra Q4 results: Profit misses estimates, margin slips to lowest in 23 quarters
He said, “There is a drop in margins. But to me, it is all temporary, I think you would see an upward tick because our investments will yield better results as we get into the next two quarters. So overall, I can only say in a good time to invest, and Tech Mahindra is investing.”
Gurnani also stated that the company's deal funnel is healthy, indicating strong demand for IT services. He highlighted the high demand for IT services and assured investors that Tech Mahindra is well-positioned to meet this demand.
The CFO of Tech Mahindra, Rohit Anand, also discussed the company's financial performance. Anand said that he expects margins to head in a positive direction and that the company has not seen any deal cancellations.
Despite the challenging economic environment, the company's healthy deal funnel and high demand for IT services suggest that it is well-positioned to succeed in the long term.
For more details, watch the accompanying video
(Edited by : Abhishek Jha)
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