Tech Mahindra registers 39% decline in net profit for Q1 FY24

Tech Mahindra net profit declines by 39%

Tech Mahindra, an IT services company and part of the Mahindra Group, reported a 38.8% decline in net profit for the first quarter, with its performance being much below market expectations.

The company reported a net profit of Rs 692.5 crore for the first quarter of FY24 as compared to Rs 1,132 crore in a similar period a year ago. This steep drop has come in as a huge disappointment for the markets and performance was much worse when compared to its peers like Wipro, Infosys, or TCS.

The revenue during the first quarter stood at Rs 13,159 crore, which was a 3.5% growth when compared to a similar period a year ago. However, the big negative highlight was on the earnings before interest and taxes (EBIT) front, which was down 36.5% on a year-on-year (YoY) basis. The EBIT stood at Rs 891 crore and in percentage terms it was 6.8% as compared to 11% a year ago.

The big drag on the performance of Tech Mahindra was from its communications, media and entertainment vertical, which accounts for 38% of its revenue, and it saw an 8.2% decline in revenue YoY. Resultantly, the employee headcount at the company at the end of the first quarter stood at 148,297 as compared to 158,035 a year ago, showing a decline of 6.2%.

On the performance of the company, Tech Mahindra CEO C P Gurnani said, “Our results this quarter reflect the uncertainty in the global economy and the IT sector. We are confident that we have the right strategy and the right team to overcome this temporary setback and deliver long-term value for our customers and shareholders.”

Fidelity International opens new office in Bengaluru

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The Bengaluru office will cover an area of 25,000 square feet and is being designed to seat 700-800 people. The company has started hiring for the new Bengaluru office for capabilities such as operations, research support, client servicing, cybersecurity, and shared services across general counsel, finance and human resources.

Kyndryl adds new services to its security portfolio

Kyndryl, the global IT infrastructure services provider has expanded its services to enable enterprise customers to quickly detect and effectively respond to and recover from cyber-attacks.

Kyndryl’s new end-to-end security operations capabilities and services will enable the company’s more than $2 billion (annual revenue) security and resiliency practice to expand its presence in the $47 billion global market for managed cybersecurity services (projected for 2025).

Cyber attacks on traditional security operations are becoming more frequent, damaging customer reputations, impacting their finances, and often causing operational shutdowns. Kyndryl is moving fast to help customers address this problem by offering a differentiated set of services that provide flexibility, along with complementary capabilities from its growing ecosystem of partners to help customers modernize and fortify their security operations.

Kyndryl’s modular Security Operations as a platform features a centralised and unified management system and enables customers to retain existing security technology and delivery investments while fortifying their operations. The new services are delivered through global centres that validate the data handled in specific locations to help customers meet compliance and data processing requirements.