Tech Mahindra sees ‘notional’ mark-to-market loss on receivables due to Brexit

MUMBAI: Tech Mahindra says it could see a mark-to-market impact on its receivables in the current quarter as a result of Britain voting to leave the European Union, but added that the loss would largely be a notional one.


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The company’s shares were down 5 per cent in Friday afternoon trade, as traders factored in the potential impact of Brexit on the company.

About 10 per cent of TechM’s revenue is in pounds but that currency crashed by 9 per cent after the Brexit vote.

“We follow a long term hedging policy on our operational exposures and we also expect that the USD which is about 50 per cent of revenue stream will appreciate against the Indian Rupee. The combination of these will mitigate the operational impact on our profitability,” CP Gurnani, CEO of Tech Mahindra, said in a statement.

Also read: Get news, views and all the updates about Brexit here

Gurnani said the company would have to wait and watch but does not see any imminent need for worry. The company also said it sees no specific downturns for its products or services.

“UK centric and TELCO customers with local play will not see impact, and TechM’s exposure to BFSI overall and BFSI exposure to UK and European banks are likely to see some minimal impact in the short term,” Gurnani said.