Telco-focused, India-based offshore services firm, Tech Mahindra, saw its revenues slip back in the quarter in dollar terms, though the weak Rupee helped push the top line forward in local currency. Headline revenues for Q3 (to 31st Dec.) as reported were down 3% qoq to $289m but up 8% in Rupee terms. At constant exchange rates, dollar revenues were the merest fraction under flat. Most of Tech Mahindra’s India-based peers also struggled in the Telco sector last quarter, with reported dollar revenue growth somewhere between flat and -4%.
Top client (and major shareholder) BT still accounts for 35% of Tech Mahindra’s revenues, though this is now declining quarter by quarter both in proportion and in real terms. Profitability started to climb back up again (see Margins hammered at Tech Mahindra) to 16.2%, but there’s still a ways to go if they are to ever get back to the heady days of 20%+ margins. This would become ‘Mission Very Difficult Indeed’ when the proposed merger with sibling Mahindra Satyam finally comes to pass, given that MSat’s margins are under 14% (see ‘Healthy progress’ at Mahindra Satyam).