Tech Mahindra announces merger of Healthnxt with Tech Mahindra (Americas), stock trades in green

The company stated that Tech Mahindra (Americas) and Healthnxt had a turnover of $1.15 billion and $1.07 million, respectively.

Healthnxt is a virtual healthcare company that offers a fully-integrated inpatient experience at home along with outsourced services. Meanwhile, Tech Mahindra (Americas) provides computer consulting, programming support services, and IT Management & Consulting Services for Healthcare and other industries.

Tech Mahindra stated that since the business of Healthnxt and Tech Mahindra Americas are complementary, consolidation of the entities will result in the synergy of business operations, optimise operational costs and reduce the compliance risk.

It added that since the companies are wholly-owned subsidiaries, the merger will take place without any cash consideration or issuance of new shares. Further, the investment of Tech Mahindra (Americas) in Healthnxt will be cancelled following the merger.

Meanwhile, Tech Mahindra reported a 51.2% year-on-year (YoY) decline in its net profit for the financial year ended March 31, 2024, to ₹2,357.8 crore. The company’s revenue from operations declined 2.4% YoY to ₹51,995.5 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) for the year slumped 38.2% YoY to ₹4,964.5 crore.

The EBITDA margin during the year contracted to 9.5% from 15.1% in the previous financial year. Meanwhile, the net profit margin contracted to 4.5% from last year’s 9.1%. The earnings per share in FY24 was lower by 51.3% YoY to ₹26.66. The board recommended a final dividend of ₹28 per equity share.

Shares of the company have risen by nearly 9% since the beginning of the year. The stock has gained nearly 28% in the last one year.