Tech Mahindra Q2 Results: Profit Up 45%, Beats Estimates

Revenue from manufacturing, and healthcare and life sciences dipped 4% and 1.8% respectively in the quarter. However, communications rose 2.7%, High-tech and media grew 5.7%, banking, financial services and insurance rose 2.4% and retail, transport and logistics grew 5.6%.

"We continue to progress on our strategic improvement efforts even as the overall IT services industry has remained soft," Chief Executive Officer Mohit Joshi said. "We see weakness in communication and manufacturing verticals, as discretionary spends remain conservative."

"All other verticals have seen faster momentum and we have signed new logos in the BFSI vertical," the CEO said. 

Project Fortius — its three-year turnaround plan — has resulted in an expansion of margins for the third sequential quarter. The company is forging partnerships to broaden services portfolio and is continuing to invest in fresher hiring programme, according to the CEO.

In terms of geographies, America dipped 2% sequentially, while Europe and the rest of the world grew 4.1% and 9.7% respectively. New deal wins at $603 million were higher than $534 million recorded in the last quarter.  The number of active clients rose to 1,178 from 1,165 in the last quarter. 

Out of the 114-bps expansion in operating margin, 40 basis points is contributed by forex movements and 70 bps by Project Fortius, Chief Financial Officer Rohit Anand said.

Employee headcount stood at 1.54 lakh with an addition of 6,653 employees since the last quarter. The company added 2,000 freshers in the September quarter and is on track to hire a total 6,000 freshers in the fiscal. Attrition spiked to 11% from 10% last quarter and utilisation stood at 86%.