Tech Mahindra shares drop after company posts biggest profit decline in 16 years

At the NSE, it dropped 3.85 per cent to Rs 1,098.15 in intra-day trade. The stock later settled at Rs 1,119.95, down 1.94 per cent.

The company’s market valuation slipped Rs 2,500.69 crore to Rs 1,08,872.61 crore.

On Wednesday, Tech M announced that its consolidated Q2 net profit fell 61 per cent to Rs 505.3 crore, mainly on account of reduced spending by clients. The firm’s net profit in the same period a year ago was Rs 1,299.2 crore.

Tech Mahindra’s consolidated revenue from operations fell by 2 per cent to Rs 12,864 crore in the period under review from Rs 13,129.5 crore in the September 2022 quarter.

Tech Mahindra CEO and MD CP Gurnani, in his last earnings call, said that the last few quarters have been the most difficult ones among the ups and downs he has seen throughout his career.

Gurnani said he believed that in terms of market timing and service offerings, the company was poised to ride some of the technology investments, particularly 5G.

“I don’t think wave was strong enough for 5G. Some of our customers had to stop or reduce their capital expenditure because their operating costs became very high. Many of the corporations borrow money and with a rising interest cost, we found some of our customers in little more difficulty that I hadn’t anticipated,” Gurnani said.