After reporting muted profits across their quarterly reports, Tech Mahindra shares took a deep plunge on the stock markets on Thursday, falling nearly six percent when the markets closed. At 3:30 pm today, Tech Mahindra shares were at ₹1,325.
Posting its earnings in the Q3 results, Tech Mahindra on Wednesday reported a 60 per cent decline in net profit to ₹510.4 crore for the December quarter, largely because of a sharp squeeze in profit margins.
Due to the muted profits in the third quarter of the year, Tech Mahindra shares tanked 6.76 per cent to ₹1,312.50 on January 25, closing at a decline of 5.98 percent on the BSE.
Recording a steep fall on the stock market today, Tech Mahindra became the biggest laggard among the Sensex and Nifty firms. The company’s market capitalisation (mcap) eroded ₹8,407.73 crore to ₹1,29,011.81 crore.
Tech Mahindra, which is the fifth largest IT services company in India, reported a 60.6% slump in profit to 5.10 billion rupees ($61.4 million) for the quarter ending in December 2023. This became the fourth straight quarter where the company has shown a double digit decline in profits.
With the company undergoing restructuring under the CEO Mohit Joshi, analysts, while optimistic about the transition, see slippages in growth and expect the stock to underperform its peers.
Tech Mahindra Q3 results highlights
Tech Mahindra on Wednesday reported a 60 per cent decline in net profit at ₹510.4 crore in the three months ended December 2023. The Mahindra group company had reported a net profit of ₹1,296.6 crore in the year-ago period while the same was at ₹493.9 crore in the quarter-ago period.
Further, the revenue from operations of the tech company slipped 4.6 per cent to ₹13,101 crore in the third quarter of the current fiscal year. Notably, the operating revenue of the company was ₹13,734 crore in the same period a year ago.
There was a sharp decline in the operating profit, with the margin narrowing to 5.4 per cent from the 12 per cent in the year-ago period.
(With inputs from agencies)