TECH MAHINDRA Q1 revenue up by 5.9% over the previous quarter

MUMBAI, July 22, 2009:

Key highlights:
• Revenue of Rs 1,113.0 crores, up 5.9% over the previous quarter
• Growth across all regions worldwide
• Completed acquisition of 42.7% stake in Satyam

Financial Summary
Tech Mahindra Limited, a leading solution provider in the telecom space, announced 5.9% growth in revenue and 1.3% decline in operating profit for Q1 FY 10 over the previous quarter. Tech Mahindra reported consolidated operating profit of Rs 280.5 crores for Q1 FY 10 as against Rs 284.2 crores in Q4 FY 09. The company's revenue is Rs 1,113.0 crores for Q1 FY 10 as against Rs 1,051.3 crores in Q4 FY 09. The company’s profit after tax for the quarter is Rs 140.1 crores in Q1 FY 10 (before exceptional item) as against Rs 230.4 crores in Q4 FY 09. This decline in net profit was primarily due to interest costs on borrowings post the Satyam acquisition. The Company has a debt of Rs. 2,380.2 crores as of 30th June 2009.

The total interest cost for the quarter is Rs. 57.1 crores as against Rs 2.3 crores in the previous quarter. Other income for the quarter was negative Rs 26.1 crores against gain of Rs 7.8 crores in the previous quarter largely on account of foreign exchange losses.
The Company acquired 31% stake in Satyam Computer Services Ltd, since rebranded Mahindra Satyam, through a preferential allotment during this quarter. The Company also acquired an additional 11.7% in Mahindra Satyam post June 30th 2009. Tech Mahindra now holds 42.70% shares in Mahindra Satyam through its subsidiary Venturbay Consultants Private Limited.

The reported consolidated numbers do not include Mahindra Satyam financials as those are being prepared for restatement.
The company derived 29%, 61% and 10% of its revenues from the US, Europe and Rest of the World respectively.

Tech Mahindra consolidated head count increased from 24,972 in March 2009 to 25,482 in June 2009.

Mr. Anand Mahindra, Chairman, Tech Mahindra said, “This has been a momentous quarter which has redefined Tech Mahindra’s positioning in the marketplace. Not only has our leadership position in telecom been reinforced, but our presence has expanded across other industry verticals as well.”

Mr. Vineet Nayyar, Vice Chairman, Tech Mahindra said, “Communications and connectivity is the backbone of every enterprise. The combination of Tech Mahindra and Mahindra Satyam now enables us to address the wider enterprise market.”

Mr. Sanjay Kalra, CEO, Tech Mahindra said, “In an uncompromising market environment, our results this quarter demonstrate our ability to offer value to our customers by leveraging our domain & technology capabilities, focus on engineering discipline and reusability.”

Operations

Tech Mahindra has signed a deal with a telecom operator in Middle East to roll-out end to end IT system for its Greenfield GSM operation. This deal involves Implementation and Managed Services for the entire application stack for next 3 years. Tech Mahindra’s tried and tested methodologies will enable the client to achieve faster go to market.

Tech Mahindra has partnered with a large TEM to test their upcoming 2G/3G devices planned for rollout on the US Tier-1 Operator Network. This will help the customer achieve a smooth rollout with minimal disruptions.

Tech Mahindra has signed a multi-year managed services deal for Mobile Number Portability on a build, operate and transfer model with one of the telecom regulators in Middle East. As a part of this engagement, Tech Mahindra would be hosting and operating a Central Clearing House (CCH) for telecom regulator which will enable the porting communication between Mobile Operators.

Tech Mahindra and CanvasM have jointly secured an assignment to enable intelligent digital environments for one of the most prestigious digital city projects in the Middle East. Tech Mahindra and CanvasM are architecting a core convergent platform for rolling out a rich bouquet of revenue generating IPTV, IP Telephony and Internet based services as well as a suite of Value Added Services keeping in mind the rapidly evolving entertainment, communication and mobility related needs of end-customers. This project will open up new revenue generation models for the client and Tech Mahindra.

Tech Mahindra has won a deal from one of the India’s leading telecom service providers to provide backend support across 18 circles. This desk will provide response, resolution and service provisioning to this operator’s customers and deliver reduced complaints and increased customer satisfaction.

Tech Mahindra has demonstrated its capabilities in next generation architecture to enable one of the large European operators to deliver enhanced broadband services to its customers. Tech Mahindra has played a pivotal role in the large scale rollout of fibre-to-the-curb (FTTC). This will enable the client to deliver superior services in the highly competitive high speed broadband market.

Awards & Rankings

• Tech Mahindra ranked #1 in Telecom Software Category in V&D 100
• Tech Mahindra ranked # 11 in “Market Share: Telecom Operations Management Systems (BSS, OSS, SDP), Worldwide, 2006 – 2008”, published in May 2009

About Tech Mahindra

Tech Mahindra is a leading provider of solutions and services to the telecommunications industry, majority stake owned by Mahindra & Mahindra Limited, in partnership with British Telecommunications plc. With total revenues of Rs 4,464.7 crores in the year ended March 31, 2009, Tech Mahindra is India’s 6th largest software exporter, and serves telecom service providers, equipment manufacturers, software vendors and systems integrators. Tech Mahindra solutions enable clients to maximize returns on IT investment by achieving fast time to market reduced total cost of ownership and high customer satisfaction. Tech Mahindra achieves this through its domain and process expertise, distinctive IT skills, research and development, proven innovative delivery models and approach to off shoring.

Assessed at SEI-CMMi Level 5 and PCMM Level 5, Tech Mahindra's track record for value-delivery is supported by over 25000 professionals who provide a unique blend of culture, domain expertise and in-depth technology skill-sets. Its development centres are ISO 9001:2000 & BS7799 certified. Tech Mahindra has principal offices in the UK, United States, Germany, UAE, Egypt, Singapore, India, Thailand, Taiwan, Malaysia, Philippines, Canada & Australia.

For more information on the financials, please refer to the fact sheet and the results advertisement on the investor section of the website: www.techmahindra.com or contact Santosh Gambhire at gsantosh@techmahindra.com