India's Tech Mahindra second-quarter revenue beats estimate

Oct 15 — India's Tech Mahindra on Thursday beat second-quarter revenue expectations, ​helped by steady growth in its manufacturing and communications verticals and a weak rupee.

The IT services company ‌also said it would issue bonus shares worth up to 4.9 billion ⁠rupees, the first time ​it has done so ⁠since 2015.

Consolidated revenue rose 15.6% to 161.80 billion rupees ($1.70 ‌billion) year-on-year. Analysts, ‌on average, expected revenue of 151.95 billion rupees, as ⁠per data compiled by ⁠LSEG.

Analysts had expected Tech Mahindra to post one of the fastest revenue growth rates among large-cap IT services companies in the quarter, driven by large deal ramp-ups from clients including telecommunications provider Orange Business.

The firm ‌reported a 32.7% year-on-year rise in ​profit to 15.86 billion rupees, missing estimates of 17.08 billion rupees.

The communications division's revenue, which accounts for a third of the Pune-based company's total, rose 9.5% year-on-year. Revenue from its manufacturing division, its second-largest, grew 7%.

Revenue from the Tech Mahindra's banking and financial services segment, which ​the company has been pushing to expand in recent ‌quarters, was up ‌4.6%.

New ⁠deal wins in the quarter stood at $1.02 billion, up from $816 million in the same quarter last year.

Larger peers TCS and HCLTech reported their results earlier in the month, while Wipro ‌reported higher quarterly revenue ​earlier in the day.

($1 = 95.0550 ‌Indian rupees)

(Reporting by ⁠Abhirami G ​and Surbhi Misra in Bengaluru; Editing by Sonia Cheema and ​Jochelle Mendonca)

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