Overview

• Tech Mahindra, an Indian IT services company, reported a significant 61.6% decrease in net profit in the September quarter. This was the company's largest fall in profit since March 2007, causing shares to drop by as much as 3.7%.
• The decrease in profit was due to a combination of increased costs, with expenses rising by nearly 7%, and reduced client spending. The biggest jump in expenses was a 30% increase in 'other expenses'.
• The IT industry in India has been facing uncertainty due to delays in deal-making, with businesses in the US and Europe cutting back on investments due to fears of an economic downturn.
• Tech Mahindra's revenue from operations also fell slightly by 2.02% on a year-on-year basis, while new deal wins decreased from $716 million to $640 million.
• Analysts predict a tough demand environment in the near term, especially in the telecom sector. However, they expect a recovery in revenue growth in the next financial year. The company is currently restructuring to reduce overheads.