HYDERABAD (Reuters) -Indian software services exporter Tech Mahindra reported a smaller-than-expected fourth-quarter revenue on Thursday due to persistent weakness in its communications and hi-tech verticals.
Consolidated revenue rose 4% to 133.84 billion rupees ($1.57 billion) year-on-year in the quarter ended March 31. Analysts, on average, expected revenue of 134.52 billion rupees, per data compiled by LSEG.
The IT services firm, which lagged its peers and is undergoing a turnaround under CEO Mohit Joshi, has also been under pressure due to its dependence on the communications vertical, whose revenue is tied to macroeconomic conditions.
It gets over a third of its revenue from this vertical. During the quarter, its revenue from the communications segment fell 2.2% on-year, which Joshi attributed to industry headwinds “due to a prolonged downturn in the sector.”
He said the company is seeing “signs of stability returning” in the segment in Europe and Asia Pacific.
India’s largest IT companies have flagged uncertainty and delays in technology spending decisions due to U.S. president Donald Trump’s unpredictable tariff policies, stoking fears of weak a fiscal year.
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. Analysts, on average, expected a profit of 10.71 billion rupees, per LSEG.
Its order bookings rose to $798 million from $500 million a year earlier.
The company saw revenue decline in its three largest segments. Revenue from its manufacturing vertical fell 5.5% and hi-tech vertical fell 4.1%. Its other segments grew.
Revenue from America, where it gets half its revenue, dropped 4.7%, while Europe grew 5.1% and its revenue from the rest of the world grew 4.8%.
Its shares closed 0.4% higher on Thursday.
($1 = 85.2750 Indian rupees)
(Reporting by Haripriya Suresh; Editing by Nivedita Bhattacharjee and Sonia Cheema)
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