Tech Mahindra Net Jumps 11.8%, Declares Bonus Issue, Stock Split

Tech Mahindra reported a better-than-estimated 11.8 per cent sequential growth in its net profit for the October- December quarter of 2014 and also declared a bonus issue.

Tech Mahindra also announced a stock split.

Tech Mahindra's net profit jumped to Rs 805 crore in the quarter ending December 31, 2014, against Rs 720 crore in the previous quarter.

Revenues of the IT outsourcer rose 4.8 per cent sequentially to Rs 5,752 crore, against Rs 5,488 crore.

Analysts polled by NDTV had estimated its net profit at Rs 798 crore on revenues of Rs 5,719 crore.

In dollar terms its revenue grew 2.7 per cent sequentially to $924 million.

"Despite seasonal weakness of the third quarter and currency volatility, Tech Mahindra turned in a fairly robust performance. Our continued focus on operational excellence is yielding tangible results for our stakeholders," Tech Mahindra Executive Vice Chairman Vineet Nayyar said.

Tech Mahindra announced to give one bonus share for every one share held in the company. This comes in the wake of its rivals Infosys and HCL Tech announcing bonus issues recently.

Tech Mahindra also decided to split its shares in the ratio of 2:1.

This means, after accounting for the bonus issue and stock split, an investor who holds one share of Tech Mahindra will now get three additional shares of Rs 5 face value. The existing share of face value of Rs 10 will be converted to four shares of Rs 5 face value.

Shares in Tech Mahindra ended 0.5 per cent lower at Rs 2,890 apiece, outperforming the broader Nifty, which closed 1.6 per cent lower.

(With agency inputs)