Tech Mahindra Q2 profit jumps 23 percent

Indian IT outsourcing firm Tech Mahindra has booked better than expected profits in the second quarter thanks to increased client spending and a good performance at its Satyam Computer Services unit .

In its results announcement, Tech Mahindra said net profit rose 23 percent rise to INR 2.96 billion (US$55 million), above market forecasts of INR 2.48 billion (US$45.6 million) according to a Thomson Reuters poll.

This was on the back of a 22 percent rise in its revenue for the quarter ended September at INR 16.3 billion (US$299 million).

The company won several deals in the second quarter, including a multi-million-dollar managed services contract in the United Kingdom and a system integration and managed services project in the Middle East.

However, brokerages are cautious over the outlook of its largest client U.K.-based BT, according to Economic Times. It noted BT's contribution in the total income has declined steadily from 45 percent two years ago to 33 percent in the latest quarter.

Vineet Nayyar, executive vice chairman of Tech Mahindra, said: "This has been an eventful quarter for us with some wins and key non-organic initiatives. Our focus on expanding capabilities to service our customers better has helped us gain traction in the market place and deliver a robust performance."

According to Tech Mahindra in its statement, the merger of Tech Mahindra and Mahindra Satyam, which it announced in March, is progressing on schedule.