Latest news with #TechMahindraLtd
Mint
30-06-2025
- Business
- Mint
Tech Mahindra: What can upset its apple cart
The Tech Mahindra Ltd stock is up 17% in the past year, beating sector index Nifty IT's 7% returns. The optimism stems from the company's ongoing efforts to revive its financial performance, which has lagged tier-1 peers due to a different vertical mix. Tech Mahindra has significant exposure to the communications vertical, which remains under stress. For competitors, a large part of their revenue comes from the relatively better placed banking, financial services and insurance sector. Going by Tech Mahindra's latest management commentary, it is on track to achieve four key objectives by FY27. These are: revenue growth above peer average, an Ebit (earnings before interest and tax) margin of 15%, return on capital employed of over 30%, and return of more than 85% of free cash flow to shareholders. True, the FY25 results indicate that Tech Mahindra is making gradual progress on select earnings a weak global economic backdrop could further hamper discretionary IT demand, putting the management's confidence to test. Tech Mahindra reported strong order wins with a total contract value of $2.7 billion, up 42.5% year-on-year. Deal wins were broad-based across key industries and markets, helping the company to diversify its portfolio. Tech Mahindra expects deal wins to be in a $600-800 million range per quarter. 'Despite strict governance on deals and programmes to get pricing increases, deal win velocity has increased. We believe that a successful turnaround is on the cards, leading to re-rating of multiples and an increase in Street earnings per share estimates," Kotak Institutional Equities said in a report dated 12 June. Tech Mahindra has revamped its sales team and go-to-market strategy, aiming to expand the deal pipeline and improve win rates. The company has adopted a selective approach to ensure margin-accretive deals. Margin improvement Its Ebit margin expanded by 360 basis points to 9.7% in FY25. This was driven by operational efficiencies, savings from Project Fortius (a plan to achieve a 15% operating margin), and the discontinuation of low-margin business. In the March quarter (Q4 of FY25), the Ebit margin improved for the sixth quarter in a row to 10.5%, ahead of consensus estimates. The management expects further margin improvement in FY26 with the help of the integration of portfolio companies, leading to a reduction in operational costs and increased utilisation. On the other hand, revenue growth has been modest. In FY25, Tech Mahindra achieved year-on-year revenue growth of 0.3%. In Q4, constant currency revenue fell 1.5% sequentially, impacted by project delays with a hi-tech client, amid macroeconomic uncertainty. On the Q4 earnings call, the management said although projects have not been cancelled, there have been deferrals and delays in decision-making. According to a recent Citi report, the macro environment is getting tougher – while it is difficult to quantify the impact, the downside risks have increased and are likely to weigh on multiples. 'Revenue trajectory has seen some impact given the macro uncertainty and impact on discretionary spends; particularly, in verticals like autos and hi-tech," it said. The global research house has a sell rating on the Tech Mahindra stock and warns of impact on Q1FY26 earnings from seasonality in Comviva, its digital solutions subsidiary. Additionally, valuations are above historical levels. At FY27 price-to-earnings, the Tech Mahindra stock is trading at 22x, showed Bloomberg data. This is higher than the 10-year average of 21x and almost in-line with larger peers Tata Consultancy Services Ltd and Infosys Ltd. Tech Mahindra is making the right moves that have helped it bridge the valuation gap with its peers. However, given the elevated macroeconomic uncertainty, the pace of execution is critical. Any miss on that front could mean a longer recovery path than the management's guidance.
Business Standard
27-06-2025
- Business
- Business Standard
Tech Mahindra Ltd Falls 0.21%
Tech Mahindra Ltd has added 6.77% over last one month compared to 4.43% gain in BSE Teck index and 3.03% rise in the SENSEX Tech Mahindra Ltd lost 0.21% today to trade at Rs 1687.35. The BSE Teck index is down 0.01% to quote at 18753.48. The index is up 4.43 % over last one month. Among the other constituents of the index, Mphasis Ltd decreased 0.09% on the day. The BSE Teck index went up 8.79 % over last one year compared to the 5.72% surge in benchmark SENSEX. Tech Mahindra Ltd has added 6.77% over last one month compared to 4.43% gain in BSE Teck index and 3.03% rise in the SENSEX. On the BSE, 1102 shares were traded in the counter so far compared with average daily volumes of 51311 shares in the past one month. The stock hit a record high of Rs 1807.4 on 12 Dec 2024. The stock hit a 52-week low of Rs 1209.7 on 07 Apr 2025.
Mint
26-06-2025
- Business
- Mint
TechM CEO Joshi's dream team elusive as leadership changes continue
Next Story Jas Bardia Within a year of joining as CEO, Mohit Joshi sought to fill critical organisational gaps by giving additional responsibilities to leaders, before moving them to entirely new roles soon after. This flip-flop signals that Joshi is not able to form a stable leadership boat, according to one analyst. Tech Mahindra has seen 11 leadership changes in the past 15 months. (File Photo: Mint) Gift this article Bengaluru: Almost 18 months into his role as Tech Mahindra Ltd's chief executive officer (CEO), Mohit Joshi is still assembling his dream team. A shake-up at the top continues for the country's fifth-largest IT outsourcer. Bengaluru: Almost 18 months into his role as Tech Mahindra Ltd's chief executive officer (CEO), Mohit Joshi is still assembling his dream team. A shake-up at the top continues for the country's fifth-largest IT outsourcer. According to an executive privy to the development, the company's regulatory filings and management statements, the Pune-based software services firm saw at least nine changes at leadership levels, including service lines and geography heads, in April, May and June. Add 11 leadership changes in the past 15 months, and the movement count at the company's senior management swells to at least 20 since March 2024. Within a year of joining as CEO, Joshi sought to fill critical organizational gaps by giving additional responsibilities to leaders, before moving them to entirely new roles soon after. This flip-flop regarding the company's leadership signals that Joshi, who took over as CEO in December 2023, is not able to form a stable leadership boat, according to one analyst. This raises questions about the company's turnaround efforts after Joshi launched a three-year plan to drive the company to growth. Joshi named Abid Mirza as the chief transformation officer in January 2024, followed by expanding Ram Ramachandran's portfolio by giving him additional responsibility of India business in April last year, apart from his then-portfolio of overseeing the company's business from the Middle East and Africa. Late last month, Tech Mahindra announced Amol Phadke as the company's new chief transformation officer. Phadke joined Tech Mahindra from Telenor, the Norwegian telecommunications firm. Phadke's predecessor, Mirza, moved to a new 'sales role" in the company's India, Middle East and Africa (IMEA) region. According to a Tech Mahindra filing to the exchanges dated 13 May, Ram Ramachandran, formerly the head of the IMEA region, is now the head of specialist sales. At least one analyst attributed the changes to CEO Joshi's struggle to bring about a transformational change in the company. 'It's certainly been difficult for Mohit (Joshi) to revamp the firm to increase its focus on broader industries such as financial services, healthcare and manufacturing while maintaining its telecom legacy, and clearly, it's a huge challenge to not only appoint the right leaders but also restructure the firm's divisions to change its culture and business focus," said Phil Fersht, chief executive of HFS research. Also Read | Why Tech Mahindra's turnaround is still a distant dream Musical chairs and gaps to fill Fersht said many IT service firms are shifting to selling software embedded with AI tools, which has led to plenty of IT outsourcers reassessing their leadership bench. 'This is causing many service firms, not just Tech M, to reevaluate their current leaders to ensure they have the right skills that are changing with the times and can compete in this emerging market landscape. This is why we're seeing a lot of musical chairs across all the leading IT service providers," said Fersht. Earlier this month, Seshan Ramachandran, who headed the company's life sciences division, announced his departure on social media. A week later, he took over as the chief operating officer of California-based Saama, a software development firm. Ram Ramachandran was replaced by Sahil Dhawan, who was previously head of enterprise applications. The same day, Manish Mangal was announced as Tech Mahindra's head of its communications business in the Americas region, replacing Abhishek Shankar, who took over as CEO of Tennessee-based Emids in March 2025. Around the same time, on 9 June, Lakshmanan Chidambaram, president of the company's Americas business, retired from Tech Mahindra. He spent 15 years in the company and joined as CEO of Bristlecone, a California-based IT service provider. In response to Mint's email for comment, a Tech Mahindra spokesperson said: 'We are continuously launching new services, innovative solutions, and strengthening market presence. To enable this, we have expanded our leadership team with key hires — including head of consulting and chief technology officer. There has not been unusual attrition at the senior level. Some transitions have occurred due to retirement or planned internal movement supported by a robust succession planning process." Joshi also announced fresh faces during the company's fourth-quarter conference call on 24 April. Arjun Saxena joined as the head of TechM Consulting, whereas Scott Sorokin joined to head its Digital Transformation and Experience Design initiatives. Also Read | How India's IT giants are earning smarter Project Fortius A second analyst attributed the changes to organizational gaps in the company. 'This could be a part of Project Fortius as Joshi is still finding gaps in the organization and trying to fill people wherever he finds them," said a Mumbai-based analyst on the condition of anonymity. Joshi outlined an ambitious three-year roadmap in April last year called Project Fortius. By March 2027, Joshi aims to increase the company's operating margins to 15% and achieve higher revenue growth than the country's top seven IT outsourcing companies. Under this program, the company will not consider acquisitions but instead focus on organic growth. Still, not all analysts are sceptical about Joshi's stint, and at least one brokerage believes Tech Mahindra could still turn around after having lagged its larger peers. Also Read | No more waiting: IT firms go deal-hunting amid slowdown 'Recent company performance, conversations with management and channel checks provide reasonable comfort around the success of the turnaround journey," said Kotak Institutional Equities analysts Kawaljeet Saluja, Sathishkumar S. and Vamshi Krishna, in a note dated 12 June. The Kotak analysts said '(1) measures are in place to ensure a disciplined approach to new deals, (2) rationalization of non-strategic/low-margin programs is underway, (3) pricing will be a margin lever and (4) internal systems and processes will continue to improve." Topics You May Be Interested In Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business Standard
26-06-2025
- Business
- Business Standard
Dynacons Systems & Solutions Ltd Falls 1.62%
Dynacons Systems & Solutions Ltd has lost 3.69% over last one month compared to 3.14% gain in BSE Information Technology index and 1.63% rise in the SENSEX Dynacons Systems & Solutions Ltd lost 1.62% today to trade at Rs 1075. The BSE Information Technology index is down 0.05% to quote at 38187.07. The index is up 3.14 % over last one month. Among the other constituents of the index, Tech Mahindra Ltd decreased 0.81% and Black Box Ltd lost 0.66% on the day. The BSE Information Technology index went up 5.12 % over last one year compared to the 5.35% surge in benchmark SENSEX. Dynacons Systems & Solutions Ltd has lost 3.69% over last one month compared to 3.14% gain in BSE Information Technology index and 1.63% rise in the SENSEX. On the BSE, 219 shares were traded in the counter so far compared with average daily volumes of 4641 shares in the past one month. The stock hit a record high of Rs 1730 on 26 Aug 2024. The stock hit a 52-week low of Rs 929.2 on 07 Apr 2025.
Business Standard
10-06-2025
- Business
- Business Standard
Tech Mahindra Ltd spurts 2.75%, gains for fifth straight session
Tech Mahindra Ltd is quoting at Rs 1622.5, up 2.75% on the day as on 12:44 IST on the NSE. The stock is up 20.23% in last one year as compared to a 8.04% jump in NIFTY and a 11.21% jump in the Nifty IT. Tech Mahindra Ltd is up for a fifth straight session today. The stock is quoting at Rs 1622.5, up 2.75% on the day as on 12:44 IST on the NSE. The benchmark NIFTY is up around 0.13% on the day, quoting at 25136.5. The Sensex is at 82493.19, up 0.06%. Tech Mahindra Ltd has gained around 3.14% in last one month. Meanwhile, Nifty IT index of which Tech Mahindra Ltd is a constituent, has gained around 0.31% in last one month and is currently quoting at 37669.2, up 1.95% on the day. The volume in the stock stood at 21.43 lakh shares today, compared to the daily average of 16.6 lakh shares in last one month. The benchmark June futures contract for the stock is quoting at Rs 1624.5, up 2.62% on the day. Tech Mahindra Ltd is up 20.23% in last one year as compared to a 8.04% jump in NIFTY and a 11.21% jump in the Nifty IT index. The PE of the stock is 44.08 based on TTM earnings ending March 25.
