Tech Mahindra Q4 Net Profit Falls 41%, Announces Growth Strategy

Tech Mahindra, a leading IT services provider, has reported a significant 41% decline in its consolidated net profit for the March quarter, amounting to Rs 661 crore. This downturn is attributed to challenges within the communications sector. Despite this setback, CEO Mohit Joshi has unveiled an ambitious three-year strategy aimed at propelling revenue growth and enhancing margins. This plan is set against a backdrop of global geopolitical instability and the rapid evolution of artificial intelligence technologies.

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The company's financial performance for the quarter ending March 2024 saw a decrease in revenue by 6.2% year-on-year, totaling Rs 12,871 crore. However, Joshi remains optimistic about the future, anticipating a visible improvement in performance from the first quarter onwards. He highlighted the volatile nature of the current fiscal year but expects a return to growth in the latter half.

Joshi's confidence stems from Tech Mahindra's comprehensive three-year roadmap, which focuses on investing in key accounts and markets, as well as integrating portfolio companies to drive revenue growth and margin expansion. The company also plans to onboard approximately 6,000 fresh graduates this year, reinforcing its commitment to nurturing new talent.

For the full financial year of FY24, Tech Mahindra witnessed a 51.2% decrease in consolidated net profit year-on-year, with revenues standing at Rs 51,996 crore, marking a 2.4% decline from the previous fiscal year. Despite these challenges, the manufacturing segment has shown exceptional performance, presenting continued growth opportunities for the company.

The total headcount by the end of Q4 FY24 was recorded at 145,455, slightly down from the previous quarter. This staffing strategy aligns with Joshi's vision for FY25 as a pivotal turnaround phase, emphasizing investment in key areas and operational excellence.

Chief Financial Officer Rohit Anand highlighted the company's robust cash generation and improved deal wins and operating margins in Q4 FY24. These achievements have facilitated consistent dividend distribution, with the board recommending a final dividend of Rs 28 per equity share for FY24.

Anand assured stakeholders of Tech Mahindra's focus on operational excellence and cost savings as fundamental to delivering superior shareholder returns. As Tech Mahindra navigates through these challenging times, its leadership remains confident in the company's long-term growth trajectory and its ability to adapt and thrive amidst global economic uncertainties and technological advancements.