Icon times
Strong topline and bottom-line performance for TechM, high attrition but flat on QoQ basis (24%) | Tech Mahindra Q4 FY22 Conference Call Highlights

Strong topline and bottom-line performance for TechM, high attrition but flat on QoQ basis (24%) | Tech Mahindra Q4 FY22 Conference Call Highlights

Published on 16 May 2022 .Views 0 .Comments 0
Share On
  • Q4FY22: Revenue at USD 1608.1 mn; up 4.9% QoQ and up 21.0% YoY. Revenue growth up 5.4% QoQ at constant currency terms. EBITDA at USD 275.7 mn; down 0.3% QoQ, up 3.6% YoY. Margins at 17.2%. Profit after tax (PAT) at USD 198.5 mn; up 8.0 % QoQ and up 24.9% YoY. Free cash flow at $111 mn, conversion to PAT at 56.0%. Revenue at ₹ 12,116 crores; up 5.8% QoQ and up 24.5% YoY. EBITDA at ₹ 2,088 crores; up 1.4% QoQ, up 7.2% YoY. Consolidated PAT at ₹ 1,506 crores; up 10.0% QoQ and up 39.2% YoY.
  • FY22: Revenue at USD 5,997.8 mn; up 17.3% YoY. EBITDA at USD 1,076.3 mn; up 16.3% YoY. Margins at 18.0%. Profit after tax (PAT) at USD 746.4 mn; up 24.9% YoY. Free cash flow at $ 595 mn, conversion to PAT at 79.7%. Revenue at ₹ 44,646 crores; up 17.9% YoY. EBITDA at ₹ 8,020 crores; up 17.1% YoY. Consolidated PAT at ₹ 5,566 crores; up 25.7% YoY. Total Dividend declared for FY22 is of ₹ 45/- per share. Free Cash flow of ₹ 4,417 Crore.
  • Growth was led by by Technology (+32% YoY), BFSI (+28% YoY), CME (+21.7% YoY in CC terms). Management expects strong demand to continue going forward on the back of digital transformation driven by 5G technology and adoption of Cloud.  
  • Management expects verticals like Hi Tech and Manufacturing to enter the $1 bn league by the end of FY23. Amidst strong demand, TechM would aim to continue the intake of new deals to be $1+ bn per quarter.
  • Post a rejig in the leadership team in Europe and America, these regions have witnessed healthy growth (+20.3%, +28.5% YoY respectively).
  • Price increases, hiring of fresh talent, increased offshoring, better business mix and growth in revenue to act as levers for EBIT margins in FY23. H1FY23 EBIT margin might be under pressure on account of wage hikes (in June), visa cost (25-30 bps impact) and seasonality of Comviva. However, the Management aspires to achieve EBIT margins of around 15% by the end of FY23 (v/s. 14.6% for FY22) as price increases and hiring of fresh talent have a lag impact in terms of being margin accretive.
  • Selling, general and admin (SG&A) expenses are expected to witness an upward movement on the back of increase in facility costs. EBIT saw a 5.5% QoQ decline on account of lower utilization, salary hikes, amortization of acquisition costs (80 bps impact) and increased hardware and software depreciation.
  • After investing heavily on acquisitions in FY22, Company would focus on organic growth and integration of acquired assets in FY23.
  • Tech Mahindra added 10,000+ freshers during FY 22 and expects to continue the same in FY 23 as a part of its plan to optimize employee costs. IT Attrition for the quarter stood at elevated level of 24%. However, was flat on a QoQ basis.
  • The company has witnessed healthy net new deal wins of US$3.28 bn (up 48% YoY) in FY22.

Disclaimer: The information here is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell stocks or MF.


LEGAL DISCLAIMER:

Use of this information is at the users own risk. The Company and its directors, associates and employees will not be liable for any loss or liability incurred to the user due to investments made or decisions taken based on the information provided herein. The investment discussed or views expressed herein may not suit all investors. The users should rely on their own research and analysis and should consult their investment advisors to determine the merit, risks and suitability of recommendation. Past performance is not a guarantee for future performance or future results. Information herein is believed to be reliable, although its accuracy and completeness cannot be guaranteed. The images used may be copyright of the company or third party. As a condition to using the services, the user agrees to the terms of use of the website and the services.

DISCLOSURES UNDER SEBI (RESEARCH ANALYST) REGULATIONS, 2014:

Yadnya Academy Pvt. Ltd. (InvestYadnya) is registered with SEBI under SEBI (Research Analyst) Regulations, 2014 with registration no. INH000008349. Disclosure with regard to ownership and material conflicts of interest

1. Neither Research Analyst nor the entity nor his associates or relatives have any financial interest in the subject Company;

2. Neither Research Analyst nor the entity nor its associates or relatives have actual / beneficial ownership of one per cent or more securities of the subject Company, at the end of the month immediately preceding the date of publication of the research report or date of public appearance;

3. Neither Research Analyst nor the entity nor its associates or his relatives have any other material conflict of interest at the time of publication of the research report or at the time of public appearance.

Disclosure with regard to receipt of Compensation

1. The Research Entity and its associates have not received compensation from the subject company in the past twelve months.

2. The subject company is not or was not a client during the twelve months preceding the date of recommendation.

Originally Published On:https://blog.investyadnya.in/strong-topline-and-bottom-line-performance-for-techm-high-attrition-but-flat-on-qoq-basis-24-tech-mahindra-q4-fy22-conference-call-highlights/

Attachments:
private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs. 9,999.00/Year.

Please login to view this free article.

This blog is available only for logged in users, please register and get access to view this article.

Recently Uploaded

premium Premium
free Free
Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
16:10
Chat with InvestYadnya