Tech Mahindra Limited (TECHM.NS) Bundle
A Brief History of Tech Mahindra Limited
Founded in 1986, Tech Mahindra Limited is a leading provider of IT services and business solutions, operating under the Mahindra Group. Initially established to provide IT services to the telecommunications industry, the company quickly expanded its expertise and client base.
In 2006, Tech Mahindra went public and was listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India. The company raised approximately ₹1,200 crore through its Initial Public Offering (IPO).
Over the years, Tech Mahindra has made several strategic acquisitions. Notably, in 2010, Tech Mahindra acquired the UK-based company, Bridging Technologies, and in 2012, it acquired the US-based company, Comviva Technologies, expanding its footprint in mobile solutions.
As of FY 2023, Tech Mahindra reported a consolidated revenue of approximately ₹40,000 crore (about $5 billion), reflecting a growth rate of 14% year-over-year. The company's net profit for the same fiscal year stood at around ₹4,000 crore, indicating a net profit margin of 10%.
The company operates across various sectors, including telecommunications, banking, insurance, and manufacturing. Tech Mahindra serves over 1,200 clients in more than 90 countries.
| Year | Revenue (₹ crore) | Net Profit (₹ crore) | Growth Rate (%) | Client Base |
|---|---|---|---|---|
| 2019 | 36,000 | 3,500 | 10 | 1,000 |
| 2020 | 37,000 | 3,800 | 2.78 | 1,100 |
| 2021 | 38,000 | 4,000 | 2.70 | 1,200 |
| 2022 | 35,000 | 4,200 | -7.89 | 1,150 |
| 2023 | 40,000 | 4,000 | 14 | 1,220 |
In terms of stock performance, Tech Mahindra's shares have seen significant fluctuations. The stock was priced at approximately ₹1,000 in January 2023 and achieved a peak of approximately ₹1,400 in August 2023 before settling around ₹1,200 by October 2023.
Tech Mahindra has actively embraced digital transformation and technological advancements. The company focuses on areas such as artificial intelligence, machine learning, and blockchain to enhance its service offerings.
With an employee strength of over 136,000, Tech Mahindra emphasizes diversity and inclusion in its workforce, hiring talent from diverse backgrounds and geographies.
In its commitment to sustainability, Tech Mahindra has initiated various green initiatives, aiming for 100% renewable energy usage by 2025.
A Who Owns Tech Mahindra Limited
Tech Mahindra Limited, listed on the National Stock Exchange of India (NSE: TECHM) and the Bombay Stock Exchange (BSE: 532758), is a major player in the IT services sector. The company is part of the Mahindra Group, a multinational conglomerate that operates across several sectors.
As of October 2023, the ownership structure of Tech Mahindra is as follows:
| Shareholder | Percentage Ownership |
|---|---|
| Mahindra & Mahindra Limited | 35.28% |
| Foreign Institutional Investors (FIIs) | 38.23% |
| Domestic Institutional Investors (DIIs) | 14.16% |
| Retail Investors | 12.33% |
| Others | 0.00% |
As per the latest quarterly report, Tech Mahindra reported a total revenue of ₹13,050 crore for Q2 FY2023-24, marking a year-on-year growth rate of 18.7%. The net profit for the same quarter was reported at ₹1,961 crore, with a net margin of 15%.
The company has shown consistent performance in the market, with a current market capitalization of approximately ₹134,000 crore. Its earnings per share (EPS) stands at ₹41.28, while the Price-to-Earnings (P/E) ratio is around 32.3.
Key stakeholders within Mahindra & Mahindra Limited include:
| Name | Designation | Ownership Ratio |
|---|---|---|
| Anand Mahindra | Chairman | 0.05% |
| Arvind P. Subramanian | Managing Director & CEO | 0.01% |
| Rajesh Jha | Global Head - Enterprise | 0.00% |
In terms of geographical distribution, Tech Mahindra generates a substantial portion of its revenue from North America, which accounted for 50% of the total revenue, followed by Europe at 30% and the rest of the world at 20%.
Tech Mahindra continues to expand its portfolio, investing significantly in digital transformation and technological advancements, positioning itself strongly within the competitive landscape of IT services and consulting. The firm is also focusing on increasing its investments in artificial intelligence and cloud computing to drive future growth.
Tech Mahindra Limited Mission Statement
Tech Mahindra Limited, a part of the Mahindra Group, focuses on leveraging technology for business transformation. The mission statement emphasizes the company’s commitment to leveraging its knowledge and expertise to drive innovative solutions and deliver business value. The company aims to provide a comprehensive range of IT services and solutions while fostering long-term relationships with customers and stakeholders.
As of Fiscal Year 2023, Tech Mahindra reported consolidated revenues of approximately ₹55,514 crore (around USD 7.1 billion), showcasing its robust presence in the IT sector. The company is dedicated to creating impactful solutions in sectors such as telecommunications, healthcare, and manufacturing.
The mission statement can be encapsulated in three core tenets:
- Customer Centricity: Delivering unparalleled customer service and establishing long-lasting partnerships.
- Innovation: Pioneering technological advancements to offer cutting-edge solutions tailored to market needs.
- Sustainability: Committing to sustainable practices that contribute to the greater social and environmental good.
| Key Focus Areas | Strategic Objectives | Recent Achievements |
|---|---|---|
| Customer Experience | Enhancing customer interaction through AI and automation. | Improved NPS (Net Promoter Score) by 10% year-over-year. |
| Innovation & Technology | Investing in R&D to develop emerging technologies. | Launched 10+ new solutions in AI and ML in 2023. |
| Sustainable Practices | Reducing carbon footprint and promoting green initiatives. | Achieved 30% reduction in energy consumption since 2020. |
| Diversity & Inclusion | Promoting a diverse workforce and inclusive culture. | Women in leadership roles increased to 25% in 2023. |
Tech Mahindra’s mission also reflects its commitment to the digital future, embracing digital transformation across industries. With a workforce of over 150,000 employees in more than 90 countries, the company aims to harness its talent to innovate and deliver sustainable solutions.
Additionally, Tech Mahindra focuses on aligning its operations with key global trends to remain competitive, including:
- Digital Transformation
- Artificial Intelligence and Machine Learning
- Internet of Things (IoT)
- Cloud Solutions
In the latest earnings report for Q2 FY 2023, Tech Mahindra reported a net profit of ₹1,206 crore, a growth of 12% compared to the same quarter in the previous year. The EBITDA margin stood at 18%, reflecting operational efficiency and effective cost management.
The mission statement of Tech Mahindra encapsulates the essence of driving impactful technology solutions while nurturing sustainable growth, strategic partnerships, and innovation in a rapidly evolving digital landscape.
How Tech Mahindra Limited Works
Tech Mahindra Limited, a part of the Mahindra Group, specializes in IT services and consulting. As of Q2 FY2023, Tech Mahindra reported a revenue of ₹13,702 crore, reflecting a growth of 3.5% year-on-year. The company's focus areas include digital transformation, consulting, and business re-engineering, primarily targeting sectors such as telecommunications, healthcare, and financial services.
In FY 2022, Tech Mahindra generated an operating profit margin of 12.34% and achieved a net profit of ₹2,102 crore. The net profit margin stood at 15.3%, indicating robust financial health and operational efficiency.
- Market Capitalization: ₹97,200 crore (as of October 2023)
- Current Share Price: ₹1,099.75
- PE Ratio: 19.75
- Dividend Yield: 0.85%
Tech Mahindra operates through various business segments, contributing significantly to its consolidated revenues:
| Business Segment | FY2022 Revenue (₹ crore) | Percentage of Total Revenue |
|---|---|---|
| Telecommunications | 6,350 | 46.4% |
| Enterprise Solutions | 2,820 | 20.6% |
| Healthcare | 1,630 | 11.9% |
| Financial Services | 2,295 | 16.8% |
The company employs over 150,000 professionals across 90 countries. Tech Mahindra aims to expand its digital capabilities, leveraging technologies such as artificial intelligence, machine learning, and Internet of Things (IoT). The company has also been investing in R&D with an annual budget of approximately ₹800 crore in FY2022.
In terms of global presence, Tech Mahindra has established over 1,000 clients, with significant partnerships including AT&T and Cisco. The company is focusing on emerging markets to strengthen its portfolio, targeting a revenue increase of 10-12% in FY2023.
Cash flow analysis for Tech Mahindra shows:
| Cash Flow Component | FY2022 (₹ crore) |
|---|---|
| Net Cash from Operating Activities | 3,500 |
| Net Cash used in Investing Activities | 1,200 |
| Net Cash used in Financing Activities | 800 |
| Net Increase in Cash and Cash Equivalents | 1,500 |
Tech Mahindra's strategic vision emphasizes sustainability and innovation. The company has committed to reducing its carbon footprint by 30% by 2025. Additionally, Tech Mahindra is actively involved in corporate social responsibility initiatives, investing over ₹70 crore in various social projects in FY2022.
With a robust pipeline of projects and a commitment to enhancing customer experience, Tech Mahindra Limited continues to position itself as a leader in delivering industry-specific solutions while ensuring sustainable growth.
How Tech Mahindra Limited Makes Money
Tech Mahindra Limited is a leading provider of digital transformation, consulting, and business re-engineering services. The company's revenue streams primarily consist of IT services, telecommunications, and business process outsourcing (BPO). In the fiscal year 2023, Tech Mahindra reported a revenue of ₹18,082 crores, reflecting a growth of 11.4% compared to the previous fiscal year.
The company operates across multiple segments, with the largest contribution coming from telecommunications, media, and entertainment, which accounted for approximately 41% of total revenue in FY 2023. This is followed by the banking, financial services, and insurance (BFSI) sector contributing around 30%.
| Segment | FY 2023 Revenue (₹ Crores) | Percentage of Total Revenue |
|---|---|---|
| Telecommunications, Media & Entertainment | 7,415 | 41% |
| BFSI | 5,424 | 30% |
| Retail & Consumer | 2,169 | 12% |
| Manufacturing | 1,298 | 7% |
| Others | 776 | 4% |
Tech Mahindra utilizes various business models to generate revenue, including fixed-price contracts, time-and-material contracts, and hybrid models. The recurring revenue from IT services is bolstered by long-term contracts. In FY 2023, the company secured 15 major deals worth over $1 billion combined, showcasing strong demand across sectors.
The company's focus on digital transformation services has led to a 20% increase in revenue derived from these solutions, amounting to approximately ₹3,615 crores. This growth is driven by advancements in artificial intelligence, big data analytics, and cloud computing capabilities.
Tech Mahindra also benefits from its strategic partnerships with major technology providers like Microsoft, Cisco, and AWS. This collaboration enhances the company's service offerings, enabling it to capture a larger market share in the rapidly evolving tech landscape.
The company's EBITDA margin stood at 16.5% in FY 2023, indicating efficient cost management and operational effectiveness. With a net profit of ₹2,404 crores, the company's net profit margin was approximately 13.3%.
International operations significantly contribute to Tech Mahindra's revenue. In FY 2023, the North American market represented about 60% of total revenues, highlighting Tech Mahindra's strong foothold in this region.
In summary, Tech Mahindra Limited's revenue generation strategy is characterized by its diversified service offerings across key sectors, robust international presence, and a strong commitment to digital transformation, which positions the company for continued growth in the global market.
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