IBM India’s earnings slip in FY19

IBM India continued to post subdued earnings growth for the second consecutive year, as slowdown in telecom segment reflected on its revenue and profit numbers in the financial year ended March.

In FY19, IBM India’s net profit declined by 12 per cent at ~2,426.4 crore, as compared to ~2,755 crore reported in the same period of the previous financial year, according to ROC filing accessed by business intelligence platform Tofler.

Revenues from operations during the period dipped 2.85 per cent to ~26,542 crore, as compared to ~27,323 crore posted in FY18. Both profit and revenues came way below its FY17 numbers when IBM India’s revenues were at ~32,324 crore and its net profit stood at ~6,189 crore. Sources in the know said advance-pricing agreement (APA) with the Central Board of Direct Taxes (CBDT) was the major reason behind company's spurt in earnings in 2016-17.

Net margin of the company in FY19 stood at 8.89 per cent, as compared to 9.88 per cent reported a year-ago period.

IBM India, which used to be one of the fastest-growing regions for the global IT firm, has seen some slackening owing to slowdown in telecom segment, which used to be the sweet spot for the Armonk, New York-headquartered technology major. IBM India has four primary business segments such as hardware, software, financing, and sale of services, which include software exports.

India is the home to IBM'S biggest employee base, with an estimated 130,000 staffers of its global employee count of 380,000.