Tech Mahindra Limited is an Indian multinational service provider in the information technology sector. It is also a major entity in the fields of business process outsourcing and networking technology solutions. The group has more than 11,52,00 employees in as many as 90 countries.
The total market cap of Tech Mahindra, as of March 2018, is more than Rs.60,344.74 crore.
Company’s Wealth and Recent Performance
Q1 FY 2018-19
The key financial highlights of the company’s performance for the Q1 FY 2018-19, ended 30 June 2018 are as follows:
- Consolidated PAT was up 12.4% YoY (year-on-year) and stood at Rs.898 crore. However, the PAT was down 26.5% QoQ (quarter-on-quarter).
- The revenue recorded an increase of 12% YoY and stood at Rs.8,276 crore. It was up 2.8% QoQ.
- EBITDA (Earnings before interest, taxes, depreciation, and amortization) stood at Rs.1,357 crore. The EBITDA margins were up 370 bps YoY at 16.4%, down 3.9% QoQ.
- Earnings per Share (EPS) was Rs.10.12 for the quarter.
- Cash and Cash equivalent stood at Rs. 8,413 crore.
- The company’s active client count reached 926 in Q1 as it added 13 active clients QoQ.
- In this quarter, Tech Mahindra and Balbix entered into a strategic partnership to launch the World’s First AI-Powered Predictive Cyber Risk Platform.
- The company has been selected by a US Telco to implement Robotic Process Automation.
- In September, Tech Mahindra announced that it is ready to set up 5G Centre of Excellence (CoE) in collaboration with Intel in USA and India.
The key financial highlights of the company’s performance for the the entire FY 2017-18, ended 31 March 2018 are as follows:
- The revenue recorded an increase of 5.6% and stood at Rs. 30,773 crore.
- EBITDA was up 12.6% and stood at Rs. 4,710 crore while EBITDA Margins stood at 15.3%; up 90 bps YoY.
- Free Cash flow for FY18 at Rs.2,760 Crore (US$ ~429 mn)
- Profit after tax (PAT) at Rs.3,800 crore; up 35.1% YoY.
- Earnings per share (EPS) was at Rs.43.02.
- The Board has proposed a dividend of Rs.14 per share (280%) on the FV (face value) of Rs.5
The key financial highlights of the company’s performance for the Q4 FY 2017-18, ended 31 March 2018 are as follows:
- The revenue recorded an increase of 7.5% YoY and stood at Rs.8,054 crore. It was up 3.6% QoQ
- EBITDA recorded an increase of up 57.1% YoY and 11.7% QoQ and stood at Rs.1,412 crore. Meanwhile EBITDA Margins stood at 17.5%; up 120 bps QoQ.
- Profit after tax (PAT) recorded a huge increase of 107.8% YoY and stood at Rs.1,222 crore. It was up 29.6% QoQ
- Earnings per share (EPS), was Rs.13.8 for the Q4.
- The company teamed up with the state government of Andhra Pradesh to establish a Cyber Security Operations Centre (APCSOC) in the city of Vijayawada.
- Tech Mahindra bagged the 2018 AT&T Supplier Award for its outstanding contributions across areas such as customer service, supplier diversity results, creative cost management solutions, and performance and sustainability.
- The company's revenue went up during this quarter by 2.9% as a leading European company in the manufacturing sector chose Tech Mahindra to be their partner in digital transformation to manage their end-to-end IT solutions and services. This included IT user support, application management, infrastructure management using their high-end digital and automation technologies and tools.
- A significant healthcare giant in the US chose the company to reinvent customer experience and improve productivity by offering complete end user field support and service desk.
- Tech Mahindra was chosen by a leading European online digital telco to transform its application portfolio. The company will help them with flexibility and security using its cloud-based options.
- A leading information and communication technology from Japan has selected Tech Mahindra to handle its sales force implementation service.
- Tech Mahindra joined hands with Toshiba Digital Solutions to aim at the smart factory market. These two entities are going to come together to channel their manufacturing heritage, expertise in domains, and their customer base to develop the market for smart factory together.
- The company acquired a stake worth 9.93% from Westbridge Ventures, in Comviva Technologies Limited, and 22.14% from the Bharti Group.
- Tech Mahindra joined hands with Gao Feng Advisory Company to launch Artificial Intelligence (AI) Lab in Shanghai. This lab will operate in the spheres of futuristic digital technologies that includes areas like Smart Process Automation, Image Recognition & Processing, AI Chatbot Services, and Machine Learning and Predictive Analytics.
- The company received the FICCI CSR Award for skill development, education, and livelihood for SMART (Skills-for-market Training program). It also bagged the Sarojini Trilok Nath NAB Award for the Best CSR work in disability.
Tech Mahindra Limited Stock trends in 2017 and 2018
- The opening price of the shares of Tech Mahindra were at Rs.501.10 in the month of January while the closing rate was Rs.602.95.
- In the month of February, 2017, the share price of Tech Mahindra opened at Rs.612.55 while by the end of the month, the price went up slightly and closed at Rs. 612.65.
- The price of the stock at the beginning of March stood at Rs.631 however it fell towards to the end. The opening price of the stock by the end of April was Rs.621.
- In the month of April, the stock price picked up the pace and reached Rs.695 towards the end. It ended the month at Rs.675.
- The scrip crossed increased gradually in the month of May and crossed Rs.700 towards the end.
- In the month of June, the price of the stock decreased marginally at the beginning. By the end of June, the scrip stood at Rs.673.
- The stock price remained stable in the month of July and closed the month at Rs.661.
- In the month of August, the price of the stock gained strength towards the end of the month. It increased by 50 points throughout the month and stood at Rs.734 by the end.
- As on 11 September 2018, the price of the stock stood at Rs.772.
Tech Mahindra Limited Stock trends in 2016 and 2017
- Tech Mahindra's share price at the beginning of 2016 was close to Rs.500 on BSE as well as NSE. The price remained in the same bracket in the first month of the year as Q3 FY16 profits dipped.
- In the month of February, 2016, share price of the company dipped by almost Rs.100 as they announced the circular resolution of Securities Allotment Committee. The share price was stable throughout the month. In the month of March, Tech Mahindra closed the trade window with its share price at around Rs.400. Through the months of March and April 2016, the share price floated around Rs.430.
- In the month of May, 2016, the share price went up to around Rs.500 as the company gained 7% as Q4 profits exceeds estimation.
- Through the months of June and July 2016, the stock price of Tech Mahindra hovered around Rs.500 to Rs.515. This was because of the acquisition of the UK-based company, The Bio Agency. Tech Mahindra made an announcement that Q1 net were up by 6.6% at Rs.799 crore.
- In August, 2016, Tech Mahindra allots 92,900 equity shares under the ESOP option. The share price through the month drops from around Rs.500 to Rs.462.
- In the month of September and October, 2016, Tech Mahindra’s share price floated within Rs.400 to Rs.450. It was during the month of September when Tech Mahindra Limited entered the DOW Jones Sustainability Markets and DJSI again. The company also launched a strategy for Network Services business. At the end of September, Tech Mahindra announced their Q2 report that stated that the company has witnessed a surge worth nearly 7%.
- The company's share price ranged between Rs.428 to Rs.463 per share in November and December, 2016, as the trade window for Q3 closed.
- In the month of January 2017, the share price floated around Rs.400. It was in this month that Tech Mahindra announced that in Q3, their net jumped by 31% QOQ at Rs.844.86 crore. However, in the month of February 2017, the share price increased to rs.502.30.
- In the month of March, Tech Mahindra acquired the US-based company, CJS Solutions Group. Despite of the acquisition, the share prices floated around Rs.501.
- The Q4 net of Tech Mahindra decreases to 30.2% QOQ to rs.589.69 crore. In the month of April, the share price hovers around Rs.400.
- The month of September, 2017, the share price opened at Rs.423.40 and floated around Rs.450 throughout the month.
- Q3 of Tech Mahindra in the year 2017, the share price closed at around Rs.504.
Should you invest in Tech Mahindra Limited?
- With acquisitions like that of the UK-based company, Bio Agency and the US-based entity, CJS Solutions, Tech Mahindra has proven to be a company with major business goals in place.
- Tech Mahindra is venturing into new avenues like artificial intelligence (AI). Hence, it proves that the company is open to try out new ventures.
- It has been chosen by significant pharma giants and information and communication technology firms to handle their sales force implementation service.
Tech Mahindra is a part of the Mahindra Group that has more than 200,000 employees in over hundred countries across the globe. It represents the innovations that connect the world and offers customer-specific IT experiences, making associates and enterprises technologically equipped. The company is worth USD4.7 billion that helps more than 900 global customers including the Fortune 500 companies. Tech Mahindra is positioned among the Fab 50 companies in Asia.
History of the Company
Launched in the year 1986 as a joint venture between Mahindra & Mahindra and British Telecom, Tech Mahindra emerged to be one of the best technology outsourcing firm. Initially, British Telecom had a stake worth 30% in the venture. In the year 2010, British Telecom sold 5.5% of its stake in the venture to Mahindra & Mahindra. This deal was sealed at Rs.451 crore. In the year 2012, British Telecom sold around 14.1% of their stake to various investors for about Rs.1,395 crore. The telecom giant sold the remaining 9.1% which amounted to 11.6 million shares to other investors earning a total gross cash amount of Rs.1,011.4 crore. With this sale, British Telecom exited from Tech Mahindra.
In the year 1995, Tech Mahindra established its office in the United Kingdom and in 2001, they expanded business operations in Germany. Till that time, Mahindra and British Telecom were mostly into telecom software. It was because of the acquisition of Axes Technologies that the venture took-off. In 2009, Tech Mahindra acquired Satyam Computers and became a major player in the IT industry of India.
Anand G Mahindra- Chairman
Mr. Mahindra's tenure as the Chairman has witnessed the group touch new heights internationally as well as domestically across significant sectors like aerospace, agriculture, automobiles, and IT. The group has also expanded inorganically through acquisitions like Reva Electric Car, Satyam Computer Services, Peugeot Motorcycles, Ssangyong Motors, Holiday Club Resorts, and Pininfarina SPA. Mr. Mahindra has served a number of significant entities, both international and national. He has been named in the Fortune Magazine's list of World's 50 Greatest Leaders in 2014 and in Barron's List of Top 30 CEOs worldwide (2016). He has also received the Asian Centre for Corporate Governance and Sustainability's Best Transformational Leader Award in the year 2012. A very strong advocate of culture and arts, Mr. Mahindra was appointed as the 'Knight in the National Order of the Legion of Honour' by the President of the French Republic in 2016.
CP Gurnani-Managing Director and Chief Executive Officer
Mr. Gurnani possesses extensive experience in acquisitions, start-ups, mergers, turnarounds, and business development. He led the group's phenomenal journey that resulted in one of the largest turnarounds in the history of corporations in India-the merger and acquisition of Satyam. In a career that spans more than 35 glorious years, he has held several positions of leadership. He was awarded the 'Entrepreneur of the Year (Manager)' by Ernst and Young, 'India Business Leader of the Year' by CNBC Asia, 'IT Person of the Year' by Dataquest in 2013 and 'CEO of the Year' by Business Standard in 2014. He is a strong advocate of child education and has founded an NGO that works towards promoting education for more than 140 under privileged children in India. This is a proof of Mr. Gurnani’s perfect leadership skills and his awareness about sectors that need change.
Tech Mahindra Limited in NSE, BSE, and Indices
Stocks of Tech Mahindra Limited can be bought and sold on any of the two stock exchanges, namely, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). It is a part of the benchmark market indices in India- S&P BSE and NIFTY. In addition to this, Tech Mahindra is also a part of BSE-100, BSE-200, and S&P CNX 500.
Tech Mahindra Limited
Plot No.45-47, KIADB Industrial Area
Phase II, Electronic City
Tech Mahindra Limited
Unit II, Wing B Level 1, Creator Building
International Tech Park
Tech Mahindra Limited
RMZ Ecoworld Infrastructure Pivate Limited
Tower 4A and 4B, Fourth Floor, Marathalli Outer Ring Road
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