Tech Mahindra reported a strong Q2 (July-sept quarter) with EBIT margins seeing a sharp expansion of nearly 413 bps on a sequential basis, strong deal wins and management says they are seeing supply-side recovery with demand resurgence in Q2.
Revenue growth was healthy at 2.9% QOQ in constant currency terms (CC), $ revenues grew by 4.8% QOQ. EBIT margin expanded sharply to 14.2% (up 413bps QOQ) led by efficiencies. Strong growth and high margins led to a beat on profits, with profits growing by 9.6% QOQ to Rs 1065cr. Growth was broad-based across verticals with the Communication vertical growing at 3.2% QOQ (forms nearly 40% of total revenues) and manufacturing grew by 0.5% QOQ. High growth was seen in the Technology, Media, and BFSI segment.
Net new deal wins were higher in Q2 at $421 mn vs $ 290 mn in the last quarter. Management said a lot of wins were tilted to digital technologies and new-age technologies. The majority of deal wins were mid-size with a Total contract value of around $25-75 mn.