HYDERABAD (Reuters) -India’s Tech Mahindra missed analyst estimates for fourth-quarter revenue on Thursday, as economic uncertainty weighed on spends by the software services exporter’s clients, especially in its telecom vertical.
The company’s communications vertical, which generates a third of its total revenue, has been struggling for the past several quarters as persistently high inflation in several countries has weighed on consumer spending, forcing clients to tighten their budgets. Revenue from the segment fell 2.2% year-on-year.
U.S. President Donald Trump’s unpredictable tariff policies have further fueled concerns about the India’s IT sector, with some of the largest companies flagging delays in technology spending decisions by clients.
“Global economic conditions continue to present challenges,” chief executive Mohit Joshi said.
He added the company was seeing volatility in some of its large sectors, especially manufacturing.
Growth had not come back in its telecom vertical, but there were “signs of stability returning” in Europe and Asia Pacific, Joshi said.
Tech Mahindra’s consolidated revenue rose 4% year-on-year to 133.84 billion rupees ($1.57 billion) in the quarter ended March 31, but missed estimates of 134.52 billion rupees.
The IT services firm, which has lagged its peers and is undergoing a turnaround under Joshi, also saw revenue decline in its manufacturing and hi-tech verticals, while its other segments grew.
“I do feel that comparatively, we are in a much stronger position than we were maybe a year ago,” Joshi said.
Tech Mahindra’s profit for the quarter rose 76.5% to 11.67 billion rupees, largely due to lower subcontracting expenses and a deferred tax gain.
Its order bookings rose to $798 million from $500 million, a year earlier.
“Deal wins being better sequentially is also a good sign. However, the exposure of the telecom vertical has again increased from a revenue perspective. This may not be construed positively, but the BFSI exposure increasing is a good sign,” Sushovon Nayak, an IT analyst at Anand Rathi, said.
($1 = 85.2750 Indian rupees)
(Reporting by Haripriya Suresh; Editing by Leroy Leo, Nivedita Bhattacharjee and Sonia Cheema)
