New Delhi: IT firm Tech Mahindra on Monday warned of weak revenue and earnings in the April-June quarter due to higher visa costs and other headwinds, dragging the company shares by over 9 percent.
"Q1 FY16 has some headwinds and tailwinds, which could see a risk of marginal decline in both revenue and EBITDA margin on a sequential basis," it said in a regulatory filing.
Seasonally weak mobility business, it said, "will be a drag on Q1 revenues and EBITDA".
Also, H1B visa costs will be a drag on margins.
However, "favourable currency movements could help both revenue and margin," it said.
It also said FY16 organic communication growth could remain subdued due to delayed decision making.
Tech Mahindra is the third company after Persistent Systems and KPIT Technologies to warn about its weak earnings in the first quarter of FY 2015-16.
The company said the deal pipeline remains healthy and investments in digital technologies, research and development, and growth factories will continue in an accelerated mode.
"Organisation wide there is renewed focus on improving operational levers and cost control parameters; however, the impact is expected to be visible only from Q3 FY16 onwards," it said.
Tech Mahindra had disappointing earnings in the quarter ended March 31, 2015 after consolidated profit fell 39.2 percent sequentially to Rs 472 crore, dented by lower margin and higher forex loss.
Shares of the company were trading at Rs 474.75 apiece, down 9.03 percent from its previous close on the BSE.
