India’s Tech Mahindra beats quarterly revenue view on manufacturing strength

BENGALURU: Indian software services provider Tech Mahindra reported bigger-than-expected third-quarter revenue on Friday, aided by growth in its communications and manufacturing segments.

Revenue at India’s fifth-largest IT firm rose 8.3% to 143.93 billion rupees ($1.58 billion) in the three months ended December 31. Analysts, on average, expected revenue of 141.58 billion rupees, according to data compiled by LSEG.

The communications division’s revenue, which accounts for a third of the Pune-based company’s total, rose 4.7%, while revenue at its manufacturing division - its second-largest, grew the most at 11.7%.

Net profit for the quarter increased 14.1% to 11.22 billion rupees, missing analysts’ expectations of 13.89 billion rupees as the company took a one-time charge of 2.72 billion rupees due to India’s newly enacted labour codes.

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Tech Mahindra’s net new order bookings rose to $1.1 billion from $745 million a year earlier.

Its Mumbai-listed shares closed 5.2% higher ahead of the results.

Larger peers such as Tata Consultancy Services, Infosys, and HCLTech reported higher numbers on the revenue front, but missed profit estimates due to the impact of the labour code provisions.