Tech Mahindra, India's sixth-largest IT company by market cap, grew 30% in the last 12 months. But its financials tell a different story.
In the nine months of FY24, its PAT fell 55% YoY. Its operating margin in the last quarter was at a 10-year low.
There are two main factors behind its earnings slump. Swipe for the details.
The US and Europe telecom and media industry, its key client, is cutting down on IT spending due to Fed rate hikes and inflation.
It had to incur Rs 1,700 crore of goodwill impairment cost since FY20.
The near-term outlook remains bleak. Telecom and media companies are still cutting down on IT spending (cont.)
It is also losing clients. In Q3 FY24, the number of clients decreased from 1,290 to 1,228.
Call it market volatility or miracles of a bull market. But investors should be cautious.