Tech Mahindra CEO CP Gurnani on how Demand is strong but the Decisions are slow
- ByStartupStory | January 31, 2023
Tech Mahindra, an IT services company, revealed on Monday a 5.2% year-on-year fall in its Q3 net profit to ₹1,297 crore, amid a tough macroeconomic environment.In rupee terms, revenue for the IT company grew 19.9% year-on-year to ₹13,735 crore while sequentially it grew 4.6%. On a constant currency (CC) basis, revenue grew by 0.2% sequentially.
Rohit Anand, the chief financial officer at Tech Mahindra stated “The fall in profits is predominantly driven by 2-3 factors – one is supply side pressures from last year to this year.We had some accounting impact from last year to now based on acquisitions that we did, some amortization of customer contract and relationship also flows in.” He pointed out that attrition and hiring inflated costs.
In an interview with CP Gurnani, MD and CEO of Tech Mahindra at an earnings press conference commented on the situation when he was asked about How does demand remain strong amid a tough macro environment? Is there a lot of fear after tech giants like Amazon, Google shed manpower?.
He stated “Firstly, those are big giants and I am no one to comment on them but if I were to look at them, there is a graph someone showed to me that said — Someone hired 45,000 people in three years. Now if they got rid of 1,500 people, why can’t we take it as a correction? I am only relating to the data, and data says my funnels are stronger than ever before.My data shows that a customer is engaging with us on cost transformation, digital transformation and business transformation — all three verticals of my service offerings. The area where we have seen slowdown is in discretionary spends, where certain B2C companies have hit a pause button.”
Additionally he was also asked about the hiring outlook at Tech Mahindra and has the attrition come down?. To which he replied “I am very very happy that attrition has come to 17%. Overall, our utilization has improved to 86.4% and I am very happy with that. In general, the environment that we all are in, I expect Tech Mahindra to be a more agile organization and as an agile organization, the budgeting, the hiring, overall management of operational metrics — instead of waiting for a quarter — I expect the leadership team to meet every month and respond to market trends. I don’t think I want to forecast hiring, all I want to assure you that Tech Mahindra would be agile. We will take in feedback and improve our operational working, on a monthly basis instead of a quarterly basis.”
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