Tech Mahindra's 3-year roadmap: CEO says FY25 will be turnaround phase
BENGALURU: Financial Year 2025 will be a 'turnaround phase' for Tech Mahindra as CEO and MD Mohit Joshi on Thursday at a post-earnings analyst call laid down a three-year roadmap and said FY26 will be 'stabilisation phase' and FY27 will be ‘Reaping returns’.
Tech Mahindra on Thursday posted a 41% y-o-y decline in its net profit for the March quarter at Rs 661 crore. Its revenue stood at Rs 12,871 crore, down 6.2% Y-o-Y.
Joshi, who was earlier with Infosys, joined Tech Mahindra last year, and addressing a media conference here he said FY25 will be a better year than the previous one.
In FY27, the IT major aims its top-line growth to be greater than that of its peer average and EBIT Margin at 15%.
In Q4, the company's EBITDA stood at Rs 1,408 crore, down 30.3% y-o-y. Its EBIT percentage in FY24 was 6.1%, down 530 bps.
The company's total contract value (deal wins) in Q4 stood at $500 million. It wants to infuse Artificial Intelligence in its offerings and the CEO said, "FY24 posed its fair share of challenges for the IT services sector; yet, amidst the global economic uncertainties, we continue to observe a notable push towards digital adoption."
Under Joshi, Tech Mahindra's focus verticals will be Telco, Manufacturing, BFSI, Hi-Tech and Healthcare & Lifesciences. Its priority segments will be Americas, Europe and prioritised countries in the Rest of the World. During the analyst call, Joshi also informed about the company's action plan that includes prioritising sales investments toward focus markets, enhancing client service and phasing out long tail accounts.
In the BFSI vertical, the company wants to target high potential sub-verticals such as wealth management, asset management, core banking and payments.
The company's total headcount stood at 1,45,455, down 795 sequentially. Its attrition rate stood at 10%, down 30 bps, and it will continue to hire freshers in FY25. The company said it will be adding 6,000 freshers. It is also building out an intensive programme to train freshers under the new Chief Learning Officer.
Tech Mahindra's CFO Rohit Anand said, “With another quarter of robust cash generation, we have reported improvement in deal wins and operating margins in Q4FY’24, which has enabled consistent dividend distribution."The company has announced a final dividend of Rs 28 per equity share.
