Tech Mahindra's Q1-FY11 consolidated net profits came in at Rs.144 Cr as compared to Rs.132 Cr, quarter-on-quarter. Its consolidated net sales were up at Rs. 1,134 Cr as against Rs. 1,113 Cr Q-o-Q.
The margins are down this quarter due to 3 factors. One is currency, weak Sterling had a major impact. The second is manpower utilization went down to 69%and third factor is higher cost with the lower revenues.
For the next quarter, certainly with the salary increases coming in, there is going to be pressure on margins. But the flip side of the exit of this quarter is that with the utilisation levels at 69%, they have quite a lot of headroom there as well as the fact that hiring of Freshers company is looking to push up the revenues and therefore leverage the cost. This might mitigate the impact of the salary increases to a large extent.
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