Tata Elxsi took an exceptional charge of Rs 956.9 million for the reported quarter, citing a one-time increase in employee benefit provisions due to India’s new labor laws.
The codes, which came into effect in November, require that employees’ wages be at least 50% of the company’s costs, and that benefits such as provident funds and gratuities are determined based on wages.
On Monday, IT companies TCS and HCLTech also reported one-time costs of Rs 21.3 billion and Rs 9.6 billion, respectively, to take into account the new labor laws.
However, Tata Elxsi’s third-quarter revenue grew 1.5% year-on-year to 9.53 billion rupees, driven by growth in the software development and services segment.
Excluding exceptional items and taxes, the company reported a profit of 2.42 billion rupees for the third quarter, down 5.4% from the same quarter last year. The company’s shares closed 1.6% higher ahead of the results.
($1 = 90.2010 Indian Rupees)
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