Oct 25 business news: Tech Mahindra Q2 net slides, but hirings grow

Tech Mahindra’s net profit slides 61 per cent

Tech Mahindra experienced a substantial decline in consolidated net profit for the second quarter of the current fiscal year (Q2 FY24). The tech major's net plummeted by 61.60 per cent year-on-year to Rs 494 crore, according to a company statement. The sharp decline in net profit indicates an increasing IT services industry slowdown. Revenues at Rs 12,864 crore were down 2.2 per cent quarter-on-quarter and 2 per cent year-on-year. Cash and cash equivalent stood at Rs 6,515 crore as of September 30, 2023.

…while hirings increased, bucking the industry trend

Contrary to the broader trend in the industry of hiring freezes and uncertain revenue forecasts due to economic challenges and uncertain demand, Tech Mahindra added 2,307 employees during the quarter ended September 30.

TCS gets Maharashtra Labour Ministry notice

The Maharashtra Ministry of Labour and Employment has issued a notice to Tata Consultancy Services (TCS), a leading IT company, in response to a complaint from a Pune-based IT union concerning the delayed onboarding of 200 lateral hires. A meeting is scheduled for November 2, 2023, for TCS to present its case. As the IT industry hits the slow street, IT services companies are delaying hiring and are planning to skip campus recruitments.

Reliance ups stake in Jio Financial Services

Jio Financial Services Limited (JFSL), recently spun off from Reliance Industries Limited (RIL), saw its promoters increase their stake from 45.8 per cent to 46.77 per cent since its August listing. The increase in promoters' stake indicates that the parent's show of confidence in its fledgling subsidiary. During the same period, mutual funds reduced their stake from 6.27 per cent to 4.71 per cent, while Foreign Institutional Investors (FIIs) lowered their holdings from 26.4 per cent to 21.58 per cent.

At the end of the September quarter, the Life Insurance Corporation of India (LIC) held a 6.66 per cent stake in JFSL. Since its stock market debut at the end of August following a demerger from RIL, JFSL's stock price has fallen below its initial listing prices of Rs 265 on the BSE and Rs 262 on the NSE. For the September quarter, JFSL reported a 101 per cent quarter-on-quarter increase in consolidated profit to Rs 668 crore, with consolidated total assets of Rs 119,598 crore and a consolidated net worth of Rs115,631 crore, media report said.

Adani Group auditor being probed

The National Financial Reporting Authority (NFRA) of India is reportedly investigating SR Batliboi, a member firm of EY in India, and one of the longstanding auditors of the Adani Group, an Economic Times report said on Wednesday. The inquiry, which includes audits dating back to 2014, may have implications for both the auditor and Adani's businesses. However, the duration of the investigation and potential outcomes remain uncertain.

Reliance-Disney deal valued at $7-10 billion

Reliance Industries Limited, which is reportedly nearing a deal to acquire Disney India’s business, potentially creating a media industry powerhouse, might see a cash and stock transaction being valued between $7-10 billion, a significant discount from Star India's estimated value of $ 15-17 billion in March 2019. The deal would solidify Reliance's presence in both broadcasting and over-the-top (OTT) media services, leveraging Disney Hotstar’s established content library, a research report from brokerage firm Emkay Securities said on Wednesday.

In the broadcasting sector, the acquisition would position Reliance as a dominant player, potentially prompting regulatory scrutiny from the Competition Commission of India (CCI) due to market concentration concerns. The deal would also strengthen Reliance’s OTT offerings, expediting subscriber growth and potentially impacting industry dynamics. Overall, the proposed acquisition is poised to reshape the media landscape, benefiting major players and potentially leading to a more competitive and consolidated market, a note to the investors said.