Tech Mahindra April-Jun net rises 52 pct

MUMBAI, July 21 (Reuters) - Telecoms software services firm Tech Mahindra Ltd (TEML.BO: Quote, Profile, Research) said net profit for the quarter to June rose 52 percent, aided by the depreciation of the rupee against dollar, better utilisation and higher offshoring.

"Our profit after tax has gone up significantly. What you are really seeing here is a margin expansion," Vice Chairman and Managing Director Vineet Nayyar said on CNBC TV18.

The rupee depreciation, offshore component of work going up and higher utilisation had all contributed to margin expansion, reflecting in the growth in net profit, he said.

The transition cost on some of its longer term contracts had also come to an end and were now starting to yield benefits, he added.

The margin on earnings before interest, depreciation, taxes and amortisation went up by 380 basis points from the previous quarter as the impact of 11 percent wage hike was compensated by all the other factors, President Sanjay Kalra told the channel.

For the quarter, the company reported a consolidated net profit of 2.59 billion rupees while revenues rose 27 percent to 11.16 billion rupees.

The company derived 72 percent of its revenues from Europe, while the U.S. contributed 22 percent, it said in a statement. Its revenues from the U.S. are expected to remain flattish, as the general mood was sombre and there was a tedency to delay in taking decisions, President, International Operations, C.P. Gurnani, told Reuters.

NEW BT CONTRACT

Tech Mahindra also said it had won a 5-year, $700 million contract from BT Group (BT.L: Quote, Profile, Research) for a system and processes transformation program.