Strong execution key for Tech Mahindra to achieve 3-year targets

The market could not make a clear assessment of Tech Mahindra with the stock swinging wildly in the last two sessions.

The results on Thursday were expected to be weak but the stock dropped slightly. However, on Friday, investors reviewed the three-year turnaround plan and decided the stock had been oversold and the price recovered 7.5 per cent. Net-net, the stock is up 7.7 per cent in the last two sessions.

Tech Mahindra reported Q4FY24 revenue of $1.48 billion, down 0.8 per cent (at constant currency). The Communications Media & Entertainment vertical was weak and declined 2.8 per cent quarter-on-quarter (Q-o-Q).

Enterprise growth was mixed, with retail declining 9.6 per cent Q-0-Q and Banking, Financial Services and Insurance (BFSI) growing well at 3.5 per cent Q-oQ. The adjusted operating profit margin was at 7.4 per cent.

Net headcount declined by 795 Q-0-Q to 145,450. The reported net profit was down 50 per cent Y-o-Y. Total contract value stood at $500 million which is down 15 per cent year-on-year (Y-o-Y) but up 30 per cent Q-o-Q.