Quarter Results

Growth at Tech Mahindra and Mahindra Logistics, despite the disruption

Tech Mahindra records highest-ever quarterly revenue and Profit after Tax (PAT) this quarter; Mahindra Logistics’ revenue grows 113 per cent despite challenges due to the second wave of Covid-19

Tech Mahindra:

Tech Mahindra Ltd., a specialist in digital transformation, consulting and business re-engineering services, announced the audited consolidated financial results for its quarter that ended June 30, 2021.

Financial highlights for the quarter (USD)

  • Revenue at USD 1,383.6 mn; up 4.1 per cent QoQ and 14.6 per cent YoY

  • Revenue growth at 3.9 per cent QoQ in constant currency terms

  • EBITDA at USD 254.3 mn; down 4.4 per cent QoQ, up 47.5 per cent YoY

  • Margins at 18.4 per cent; down 160bps QoQ

  • Profit after tax (PAT) at USD 183.2 mn; up 24.1 per cent QoQ and 42.2 per cent YoY

  • Free cash flow at $ 172.4 mn, conversion to PAT at 94.1 per cent

Financial highlights for the quarter (INR)

  • Revenue at INR 10,198 crores; up 4.8 per cent QoQ and 12.0 per cent YoY

  • EBITDA at INR 1,876 crores; down 3.7 per cent QoQ, up 44.3 per cent YoY

  • PAT at INR 1,353 crores; up 25.1 per cent QoQ and 39.2 per cent YoY

Other highlights

  • Total headcount at 126,263, up 5,209 QoQ

  • Cash and cash equivalent at USD 1,818.2 mn as of June 30, 2021

CP Gurnani, Managing Director and Chief Executive Officer, Tech Mahindra, said: “We have witnessed an all-rounded performance this quarter with growth across our key markets and industry sectors. We continue to see strong traction in large deal wins as we help our customers in integrated digital transformation. Our focus on key technology pillars wrapped around an experience-led approach with TechM Nxt. Now will help us to capitalise on the strong demand momentum.”

On the other hand, Milind Kulkarni, Chief Financial Officer, Tech Mahindra, said: “We continue to build on our profitability journey and have reported highest-ever quarterly revenue and Profit after Tax this quarter. Delivery Excellence will be a cornerstone in improving our operational and financial metrics as we look to capitalise on the incremental digital spending over the year.”

Key wins

  • Tech Mahindra has won a deal with a leading UK telecom company for an end-to-end customer experience for both consumer and enterprise businesses.

  • Tech Mahindra has been engaged by one of the largest private healthcare systems in the US as a managed service partner for technology transformation.

  • Won a strategic digital assurance deal with an American technology company.

  • Tech Mahindra has been chosen by a Tier 1 US Telco in the data and analytics space for data platform modernisation and cloud migration.

  • Has been chosen by Tier 1 automotive equipment supplier for managed security services and greenfield service desk implementation.

  • Engaged by the world's largest public funded healthcare programme for establishing and managing contact centre operations for Covid vaccination programmes.

  • Chosen by an Australian government division as a digital transformation partner.

  • Won a deal with one of the largest railroad companies in the US for strategic IT modernisation leveraging the digital and analytics expertise.

  • Selected by an Asia Pacific energy company for an end-to-end transformation, including infrastructure, cloud and cybersecurity services.

  • Has been engaged by a large bank in Africa for core banking transformation.

Business highlights

  • Tech Mahindra to launch ‘Stablecoin-As-A-Service’ blockchain solution for global banks and financial institutions with Quantoz, a Netherlands-based innovative blockchain technology application incubator, specialised in building and implementing blockchain-based solutions.

  • Tech Mahindra has joined the 1.5°C supply chain leaders to reduce greenhouse gas emissions across the full value chain.

  • Tech Mahindra and Rajasthan Royals, inaugural IPL (Indian Premier League) champions, have partnered to build on fan loyalty and fan monetisation. This collaboration aims to derive three times the value from a loyal fan base using Tech Mahindra’s digital platform powered by next-generation technologies.

  • Tech Mahindra has launched the ServiceNow business unit to accelerate digital transformation for customers globally. It is focused on delivering innovative industry solutions for key verticals like Telecommunications, Media and Entertainment and Energy and Utility.

  • Tech Mahindra has announced a partnership with TAC Security, the global leader of risk and vulnerability management, to enable next-generation enterprise security for customers globally.

  • Tech Mahindra Foundation, the CSR (Corporate Social Responsibility) arm of Tech Mahindra, announced its support to Mission Oxygen, an initiative by Democracy People Foundation, to ensure last-mile delivery of oxygen supply across India. The partnership will strive to ensure that hospitals, nursing homes and medical care facilities, especially in Tier 2 cities, get immediate access to oxygen.

  • The company is partnering with many of its global customers to collectively drive the Covid-19 support movement in India.

  • Partnered with the International Chess Federation to create the Global Chess League together. The competition will be established as a first-of-its-kind “phygital” (physical and digital) league, engaging players from all levels – professional or otherwise.

  • Announced its support to #OxygenForIndia, a volunteer-run organisation put together by the Center for Disease Dynamics, Economics & Policy (CDDEP), to deploy 3,000 oxygen concentrators and 40,000 oxygen cylinders to help resolve the oxygen crisis in India.

Mahindra Logistics:

Meanwhile, Mahindra Logistics Ltd. (MLL), one of India’s large 3PL solutions providers, announced its consolidated financial results for the quarter that ended on June 30, 2021.

Q1 F21 had witnessed extreme disruptions due to lockdowns imposed to contain the spread of Covid-19 and hence to that extent, the previous year’s numbers factor that impact.

Commenting on the performance, Rampraveen Swaminathan, Managing Director and CEO of Mahindra Logistics, said: “We delivered a strong performance despite the challenging external environment due to the rapid spread of the second wave of the Covid-19 pandemic. The regional lockdowns, high commodity costs and fuel prices impacted demand across the end markets. Our strong focus on customer retention, new account acquisition and cost reduction helped us offset these challenges. Implementation of our strategic initiatives continued through the quarter, and we anticipate a strong uptick in economic activity for the rest of the year. We have launched several initiatives to improve our preparedness for the future with employee assistance programmes and vaccination campaigns. As part of the relief programmes, the company supported the ‘Mahindra Oxygen on Wheels’ initiative to provide last-mile delivery support for oxygen cylinders across the country.”

Key highlights

  • Recorded 113 per cent growth in overall quarterly revenue, despite the disruptions due to the second wave of Covid-19.

  • Growth in supply chain segment during the quarter at 114 per cent YoY, contributed by increased business volumes across all end markets.

  • Revenue from warehousing services and solutions grew 30 per cent over the same period last year with a continued focus on a solutions-led approach to customer’s requirements.

  • Positive traction observed post-launch of “EDel”: electric last-mile delivery solution. The company sees a strong demand environment with an opportunity for continuing fleet deployment.

  • Continuing focus on cost management and cash flow from operations.

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