COMPANY OVERVIEW
About Tech Mahindra:
Tech Mahindra offers technology consulting and digital solutions to global enterprises across industries, enabling transformative scale at unparalleled speed. With 145,000+ professionals across 90+ countries helping 1100+ clients, TechM provides a full spectrum of services including consulting, information technology, enterprise applications, business process services, engineering services, network services, customer experience & design services, AI & analytics, and cloud & infrastructure services. It is the first Indian company in the world to have been awarded the Sustainable Markets Initiatives Terra Carta Seal, in recognition of actively leading the charge to create a climate and nature-positive future.
Tech Mahindra is part of the Mahindra Group, founded in 1945, one of the largest and most admired multinational federation of companies. For more information on how TechM can partner with you to meet your scale at speed imperatives, please visit https://www.techmahindra.com/
INDUSTRY OVERVIEW
The past year can be defined as a year of endurance given the moderation in services revenue growth underscored by the tricky market dynamics that had permeated throughout the year. Persistent high interest rates and multi decade high inflation in key markets coupled with cloudy geo-political environment weighed on enterprises spending decisions and budget provisions. According to NASSCOM, there is a sharp fall in growth of tech service providers from 7-8% in CY22 to 3-4% in CY23 as enterprises continue to lower discretionary spending and focus on deriving ROIs from prior investments. Translations from deal bookings to revenue was slower and there was continued pressure on large deal margins.
According to various research houses and industry bodies, the industry is at the cusp of rebound in CY24, with expectations of a gradual improvement, but still not to the level of historically witnessed averages, backed by a limited soft recession, easing of monetary policies and higher private capex aimed at exploring new markets and innovative offerings. To add on, the uncertainty around geo-political disturbances will continue to remain a key consideration to watch out for. There are expectations for an increase in spend across cloud, IT modernization, digital customer experience, and digital engineering projects. Generative AI is an important focus area for enterprises globally, with data summarization, assisted problem solving, code generation and translation being the focus application areas.
According to estimates, the total global enterprise spends on IT are likely to reach to USD 3.7 tn in 2024. The BFSI segment will continue to be highest spending vertical for IT services, driven by continuously expanding digital capabilities in financial services organisations. BFSI companies (including insurance companies) IT spend is likely to cross USD 1.3 tn by the year 2027. Life Sciences and Healthcare segment will continue to grow steadily with IT spending expected to cross USD 350 bn by 2027. The IT spends by CME segments are also expected to rebound to reach USD 885 bn mark in the year 2027.
Growth estimates for key markets:
Industry |
CAGR 2023-25 |
Communications | 0.0% |
Manufacturing | 5.1% |
BFSI | 3.4% |
Technology, Media & Entertainment | 6.2% |
Healthcare & Lifesciences | 8.1% |
OUTLOOK FOR KEY SEGMENTS
? Communications:
Telecommunications has been the key differentiator for TechM given our origins and significant domain specialisation built through the decades. We leverage the extensive capabilities & domain knowledge in this segment, with a balanced portfolio of bespoke offerings, marquee clientele and presence across key markets.
? Manufacturing:
The key demand drivers for this segment is the need for resiliency and operational efficiency. We see opportunities in areas like tech stack modernization, supply chain transformation, IOT based connected manufacturing and automation initiatives. We have built strong expertise in areas like auto and engineering. We have also leveraged the expertise at our parent company to co-create innovative solutions for the automotive sector and factories of the future.
Banking, Financial Services and Insurance:
BFSI, being the largest IT outsourcing market, is one of the key focus areas for the company. The demand in this segment is driven by the need for cloud adoption and digitalization. We will see continued investments towards data driven operations, and omni channel experiences for customers. TechM has a sizeable play in this segment, especially in areas like core banking, customer experience, cyber security, risk, compliance and ESG data management.
? Technology, Media and Entertainment:
ThishasbeenthefastestgrowingIndustrysegment for the Company in recent years. The surge in outsourcing demand was driven by focus on cost rationalisation on one hand and the scarcity of skilled D&A talent on the other. We have assisted hi-tech companies in product engineering, IT transformation, and digital operations. In the M&E space, we see opportunities in cloud migration services and in cloud infrastructure governance, support, and monitoring services. We have also built capabilities in areas like in semiconductor, ISV, & gaming.
OUR STRATEGY
TechM is uniquely positioned in the industry as large global service provider with full spectrum of capabilities and an agile organisation optimised for delivering innovation at speed. This unique combination of Scale & Speed makes TechM a partner of choice for enterprises which are looking for large scale transformation at speed.
Businesses will continue to experiment and build up on incorporating Automation & Gen-AI based capabilities and Sustainability in their operations as they push for efficiency and productivity gains. Tech Mahindra will be at the forefront of this revolution by being the Digital Partner of Choice for these organisations, as we further enhance and expand on our portfolio of AI and Gen-AI offerings under the TechM amplifAI suite of Gen-AI solutions and foster deeper collaboration with clients and ecosystem partners by continuing to co-innovate and scale up pilot use cases & proof of concepts by leveraging our early investments, global presence and the innovative powers of Makers Labs.
Sustainability and modernisation now go hand in hand. Tech Mahindra has opened its doors to sustainable solutions for enterprises, that are driven by new-age technologies and decades of experience through our Sustainability as a Service offerings. These offerings can be infused into and transform an enterprises business model, the processes that define it, the applications that deliver it, and the infrastructure that supports it while making a greener, better organisation.
As we move forward, Tech Mahindras purpose-driven and entrepreneurial attitude to build pioneering systems, processes, and solutions for enterprise clients across the globe will only be further strengthened as we focus on transforming clients businesses across products, services, business models and reimagined business processes to enable them to create a connected world and deliver a connected experience.
KEY ERM DURING FY24
Risk and Impact |
Mitigation Strategy |
Risk: Risk of economic slowdown or recession in global economic growth |
The Company is closely monitoring any effect this could have on revenues and is preparing to deploy suitable strategies to align variable costs to the revenue outlook. The company |
Impact: Macroeconomic headwinds viz., GDP projections, persistent inflation, interest rate cycles, and instability in the |
is also evaluating the possible opportunities that may arise from this economic situation. |
financial systems causing uncertainty which in turn may cause Customers to proceed with caution, adversely impact business sentiments. |
|
Risk: Revenue Risk - Slackness in demand from existing customers impacting revenue growth |
To offset the possibility of lower spend, newer offerings and tech solutions, along with clients-focused solutions to either optimize costs or promote customers digital initiatives are |
Impact: Reduction in Customers spend or share of wallet could adversely impact our revenue growth. |
being pursued. |
Risk: Cyber Security and Privacy Risks - Risk of data theft, deviation to information security requirement and cyber attacks |
Data protection controls (encryption, data leakage prevention etc) and Cyber security tools (firewalls, antivirus, etc) are deployed to prevent cyber-attacks and data exfiltration. |
Impact: Unauthorized use or disclosure of employee or company or customer data may lead to either breach of customer contract or fines/penalties from regulators and/or damage companys reputation. |
User awareness and supplier risk management is rigorously implemented to ensure effective deployment of data security controls. |
Security controls are continuously monitored and rigorously assessed through Annual Privacy Audit, IT Audits, External Health Check Audits and Customer Audits. |
|
Risk: Impairment and M&A Integration Risk Impact: Possibility of declining business performance of acquired companies, due to weak economic environment or other strategic or operational factors, leading to impairment. Inability, delay, or failure to integrate with the acquired portfolio companies to achieve the desired strategic synergies may result in either financial losses, damage to reputation, decreased productivity, loss of employee morale or legal matters |
A dedicated team monitors the business performance of the acquired companies and corrective actions are initiated as required. Synergy benefits of large customer network, competencies, or cost optimization possibilities of TechM are leveraged upon, to the extent possible. |
The M&A Team updates the Leadership and the Investment Committee on the aspects of performance, impairment, consolidation, and integration, etc. |
|
While we actively aim to reduce the number of subsidiaries and branch offices, for the unmerged entities, we focus extensively on back-office integration to drive synergies and economies of scale. |
|
Risk: Human Capital Risks High attrition levels, Involuntary churn, and employee productivity due to work from home (WFH) |
The Company has continued to effectively manage attrition. |
Impact: High attrition levels adversely impact resource deployment on new and existing projects. |
The leadership transition has been smoothly executed with open communication with all stakeholders for effective change management. |
Leadership change and/or organizational change could result in some employee churn. |
A command center for monitoring productivity issues and security concerns, arising from WFH, continues to be in force. The company has introduced compulsory partial work from office. |
Partial work from home carries the risk of loss of productivity and associated cyber security and data protection risks |
|
Risk: Statutory Compliance Risk - Tracking changing compliance requirements across geographies |
Applicable statutory compliances are tracked through our Global Compliance Management System (GCMS) with a bottoms-up process and dashboarding prior to compliance certification. |
Impact: Tracking the changing compliance requirements in multiple countries and adhering to the same for multiple entities is a challenge, and non-compliances could hurt our reputation as well as result in penal action by the concerned authorities. |
A refresh of the laws and compliances in the tool has taken place and shall also continue to repeatedly be done to ensure that all requirements in the tool are updated and relevant. |
Risk and Impact |
Mitigation Strategy |
Risk: Technology Risk - Risk of deficiencies in emerging competencies |
Investment in the right technological competencies is key to maintaining our competitive edge. Our strategy of Scale at Speed drives us towards building capabilities in newer |
Impact: Inability to timely adopt and invest in emerging |
|
competencies may result in a competitive disadvantage. | technologies that have the potential for being adopted by enterprise at scale. Investment in new-age technological skills, including carefully curated training programs for upskilling the existing workforce, continue to be implemented. Key areas like artificial intelligence and virtual reality are well entrenched in our competencies. |
Further, developing or acquiring new technologies or capabilities and organization-wide adoption has significant cost implications. |
|
Risk: Delivery Capability / Capacity Risk |
A robust physical and digital infrastructure is maintained to adhere to the highest quality standards. |
Impact: The risk of not being able to deliver on time, or within budget or not meeting customer specifications is an inherent project-level risk in our industry. Inability to surmount these challenges could lead to penalties and/or loss of business and loss of reputation. |
From a program governance perspective, a dedicated Program Office monitors and reports on various parameters of each engagement. Large engagements undergo additional review by Delivery Heads. Additional Steering |
Committee reviews are undertaken by leadership regularly for critical engagements. |
|
Risk: Legal and Contractual risks |
Contract-level risks are managed by our in-house legal team |
Impact: Legal, litigation and contractual risk arising out of contract execution and matters arising out of IPR, tax, regulations, employment contracts, adverse rulings, mergers, etc. | who thoroughly review each contract to ensure appropriate contractual liabilities are assumed and necessary approvals are obtained as per the defined authority matrix. A contract management system is in place that digitizes the contract lifecycle and effectively manage the authoring, obligation management and risk management aspects of contracting. |
Additional oversight at the executive and board level is exercised through discussion on high-risk contracts at the Risk Management Committee meeting. The legal team provides necessary support on matters relating to compliance, local in-country laws, taxation, etc. and seeks external counsel wherever required. We also have a robust mechanism for appropriately dealing with litigations. |
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Overview
The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and as per Indian Accounting Standards (IND AS) for the year ended 31st March, 2024.
The financial statements of Tech M and its subsidiaries have been consolidated on a line-by-line basis by adding together like items of assets, liabilities, income, expenses, after eliminating intra-group transactions and any unrealized gains or losses in accordance with the Indian Accounting Standard - 110 on "Consolidated Financial Statements" (IND AS 110).
The discussion on financial performance in the Management Discussion and Analysis relate primarily to the standalone accounts of Tech Mahindra Limited. Wherever it is appropriate, information pertaining to consolidated accounts for Tech Mahindra Limited & its subsidiaries is provided for the current year and previous year. For purpose of comparison with other firms in this industry as well as to see the positioning and impact that Tech Mahindra Limited has in the marketplace, it is essential to take the figures as reflected in the Consolidated Financial Statements.
A. STANDALONE FINANCIAL POSITION
1. Equity Share Capital
The authorized share capital of the Company is
Rs. 9,093 Mn divided into 1,818,600,000 equity shares of Rs. 5/- each. The paid-up share capital stood at Rs. 4,884 Mn as on 31st March, 2024 compared to Rs. 4,871 Mn as on 31st March, 2023. The increase in paid-up capital during the year is due to the issue of 26,11,048 shares on account of conversion of options into shares by employees under the Employee Stock Option Plans.
2. Other Equity a) Securities premium account
The addition to the securities premium account of Rs. 1,735 Mn during the year is due to the amount transferred from share option outstanding account on exercise of stock options to the tune of Rs. 1,513 Mn and transfer on allotment of equity share Rs. 222 Mn.
b) Retained Earnings
The surplus in the Statement of Profit and Loss as on 31st March, 2024 was Rs. 197,067 Mn compared to Rs. 214,462 Mn as on 31st March, 2023.
3. Right of Use Liabilities
In compliance with the accounting standard IND AS 116 Lease accounting, Right of Use ("ROU") liability has been recognised. Balance of ROU Liability as on 31st March, 2024 is shown in the table below:
Rs. in million
ROU Lease liabilities |
As at 31st | March |
2024 | 2023 | |
Long Term | 2,938 | 3,708 |
Short Term | 1,737 | 2,083 |
Total | 4,675 | 5,791 |
4. Property, Plant and Equipment
The movement in Property, Plant and Equipment is shown in the table below:
Rs. in million
Property, Plant and |
As at 31st | March |
Equipment |
2024 | 2023 |
Gross Book Value |
||
Land Freehold | 459 | 459 |
Buildings | 22,803 | 22,773 |
Leasehold Improvements | 1,089 | 1,169 |
Plant & Equipments | 16,457 | 16,225 |
Computers | 27,311 | 26,295 |
Office Equipments | 2,427 | 2,204 |
Furniture and fixtures | 7,576 | 7,426 |
Vehicles | 176 | 169 |
Intangible assets | 14,592 | 14,311 |
Total |
92,890 | 91,031 |
Less: Accumulated | 69,298 | 64,090 |
depreciation & | ||
amortization | ||
Net block |
23,592 | 26,941 |
Add: Capital work- | 943 | 476 |
inprogress | ||
Net fixed assets |
24,535 | 27,417 |
The Net Block of Fixed Assets and Capital Work in Progress stood at Rs. 24,535 Mn as on 31st March, 2024 as against Rs. 27,417 Mn as on 31st March, 2023. During the year, the Company incurred capital expenditure (gross) of Rs. 4,221 Mn (previous year Rs. 5,555 Mn). The major items of Capital Expenditure include addition to Computers, Software and Plant & Equipment.
Right of Use Assets
In compliance with the accounting standard IND AS 116 Lease accounting, Right of Use ("ROU") Assets has been recognised with effect from 1st April, 2019. Balance of ROU Assets as on 31st March, 2024 is Rs. 4,735 Mn as against Rs. 5,521 Mn on 31st March, 2023.
5. Financial Assets
The summary of Companys investments are given below.
Rs. in million
INVESTMENTS |
As at 31st | March |
2024 | 2023 | |
Non Current Investments |
||
Investment in Subsidiaries | 122,949 | 121,664 |
Investment in Term | 4,267 | 4,259 |
Deposits with Financial | ||
Institutions, Associates & | ||
others (treasury bonds & bills) |
||
Total Investments |
127,216 | 125,923 |
Less : Provision for | 20,591 | 17,697 |
diminution of value | ||
Net Non Current |
106,625 | 108,226 |
Investments |
||
Investment Property |
713 | 748 |
Total Non Current |
107,338 | 108,974 |
Investments |
||
Current Investments |
||
Investment in mutual funds | 24,217 | 21,566 |
Term Deposits with | 2,192 | |
Financial Institutions | ||
Investment in non- | 1,295 | 1,219 |
convertible debentures | ||
and commercial papers | ||
Total Current |
25,512 | 24,977 |
Investments |
||
Total Investment |
132,850 | 133,951 |
Total investments (non-current) as on 31st March, 2024 stood at Rs. 107,338 Mn as against
Rs. 108,974 Mn, as on 31st March, 2023. Investment in Subsidiaries amounted to Rs. 102,358 Mn as on 31st March, 2024 as against Rs. 103,967 Mn as on 31st March, 2023. Diminution in value of investments in subsidiaries increased by Rs. 2,895 Mn during the year.
Investment in liquid mutual funds as at 31st March, 2024 was Rs. 24,217 Mn (previous year
Rs. 21,566 Mn), increase of Rs. 2,651 Mn, increase in Current Investment in non-convertible debentures and commercial papers is Rs. 76 Mn and decrease in Term Deposits with Financial Institutions is Rs.2,192 Mn.
6. Deferred Tax Asset
Deferred tax asset as of 31st March, 2024 was at Rs. 6,142 Mn as compared to Rs. 4,358 Mn as of 31st March, 2023. Deferred tax assets represent timing differences in the financial and tax books arising from depreciation of assets, provision for doubtful debts and leave encashment & gratuity.
The Company assesses the likelihood that the deferred tax asset will be recovered from future taxable income before carrying it as an asset.
7. Trade Receivables
Trade Receivables (includes unbilled, contract assets, contractually reimbursable expenses) at
Rs. 106,362 Mn (net of provision for doubtful debts and expected credit loss of Rs. 6,904 Mn) as of 31st March, 2024 as compared to Rs. 117,527 Mn (net of provision for doubtful debts and expected credit loss of Rs. 5,314 Mn) as of 31st March, 2023. Debtor days as of 31st March, 2024 (calculated based on per-day sales in the quarter) were 93 days as compared to 97 days as of 31st March, 2023.
8. Cash and cash equivalents
The bank balances include both Rupee accounts andforeigncurrencyaccounts.Thebankbalances in overseas current accounts are maintained to meet the expenditure of the overseas branches and overseas project related expenditure.
Rs. in million
Cash and cash |
As at 31st | March |
equivalents |
2024 | 2023 |
Bank balances in India & | ||
Overseas | ||
Current accounts | 9,337 | 7,797 |
Deposit accounts | 5,881 | 4,241 |
Total cash and bank | 15,218 | 12,038 |
balances* |
* Including unrealised (gain) / loss on foreign currency.
9. Other financial assets, Other assets and Loans
Other financial assets, other assets & loans as on 31st March, 2024 were Rs. 71,721 Mn compared to
Rs. 74,705 Mn as on 31st March, 2023. Other financial assets include foreign currency derivative assets, security deposits, advances to related parties, interest receivable, lease receivable. Other assets include prepaid expenses, balance with government authorities, contract asset, advance income tax, capital advances.
10. Provisions, Financial Liabilities & Other liabilities
Liabilities and provisions were Rs. 97,953 Mn as of 31st March, 2024 including long-term liabilities and provision of Rs. 11,308 Mn and short-term/ current liabilities and provisions of Rs. 86,645 Mn compared to Rs. 90,218 Mn as of 31st March, 2023 including long-term liabilities and provision of
Rs. 8,650 Mn and short-term / current liabilities and provisions of Rs. 81,568 Mn as of 31st March, 2023.
B. RESULTS OF STANDALONE OPERATIONS
The following table sets forth certain income statement items as well as these items as a percentage of our total income for the periods indicated:
Particulars |
FY 2024 |
FY 2023 | ||
Rs. (In Mn) | % of Total income | Rs. (In Mn) | % of Total Income | |
INCOME |
||||
Revenue from Services | 420,993 | 426,573 | ||
Other Income | 12,525 | 11,283 | ||
Total Income |
433,518 | 100% | 437,856 | 100% |
EXPENDITURE |
||||
Personnel Cost | 160,823 | 149,693 | ||
Subcontracting Expenses | 166,886 | 170,368 | ||
Operating and Other Expenses | 66,618 | 53,309 | ||
Depreciation | 8,149 | 8,129 | ||
Interest | 2,464 | 1,808 | ||
Impairment of non-current investments | 2,931 | 5,508 | ||
Total Expenditure |
407,871 | 94.1% | 388,815 | 88.8% |
Profit before tax |
25,647 | 6.1% | 49,041 | 11.5% |
Provision for Taxation | 4,361 | 1% | 11,266 | 2.6% |
Net profit for the year |
21,286 | 4.9% | 37,775 | 8.6% |
1. Revenue
The Company derives revenue principally from technology services provided to clients from various industries.
Revenue decreased to Rs. 420,993 Mn in FY 2024 from Rs. 426,573 Mn in FY 2023.
Consolidated Revenue
Consolidated Revenue for FY 2024 was Rs. 519,955 Mn ($ 6,277 Mn) compared to Rs. 532,902 Mn ($ 6,607 Mn) in FY 2023, a year on year decline of 2.4% (decline of 5.0% in USD).
The decline in revenue (in USD terms) was mainly in CME vertical (-12%) as our telco clients reprioritised their budgets due to uncertain macroeconomic conditions, including persistent high interest rates. Amongst other verticals, there was an increase in revenue in Manufacturing (7%) and Hitech (1%) offset by decline in BFSI (-6%) and Retail, Transport & Logistics (-4%)
Consolidated revenue by Geography
Revenue from Americas was 51.8% in FY 2024 compared to 49.9% in FY 2023 while the share of revenue attributable to Europe was 24% in FY 2024 compared to 24.9% in the previous year. Revenue from Rest of the World as a percentage of total revenue was 24.2% in FY 2024 compared to 25.2% in FY 2023.
Consolidated revenue by Vertical
For FY 2024, revenue from Communications, media & entertainment was 36.9% compared to 40% in previous year. Revenue from Manufacturing was 17.7% in FY 2024 compared to 15.7% in FY 2023. Revenue from Technology was 10.7% in FY 2024 compared to 10.1% in FY 2023. Revenue from Banking, financial services & insurance was 16% in FY 2024 compared to 16.2 % in FY 2023. Revenue from Retail Transport & Logistics was 8.1% in FY 2024 compared to 8% in FY 2022. Revenue from Others was 10.5% in FY 2024 compared to 10% in previous year.
Consolidated Revenue by Segment
For FY 2024, 85.2% of revenue came from IT services, whereas 14.8% of revenue came from BPO services. The revenue share for FY 2023 from IT & BPO services was 86.5% and 13.5% respectively.
2. Other Income (Standalone)
Other income includes interest income, dividend income, foreign exchange gain/loss, rental income, and net gain on disposal of assets & miscellaneous income.
Interest income mainly consists of interest received on bank deposits. Dividend income includes dividend received on long-term investments as well as that received on current investments. Exchange gain/loss consists of mark to market gain/loss on ineffective hedges, realized gain/ loss and revaluation gain/loss on translation of foreign currency assets and liabilities. Other income is Rs. 12,525 Mn in FY 2024 compared to
Rs. 11,283 Mn in FY 2023.
Increase in other income was mainly due to higher Dividend Income on Investment in current financial year.
3. Expenditure (Standalone) |
||||
Particulars |
FY 2024 | FY 2023 | ||
Rs. (In Mn) | % of Total | Rs. (In Mn) | % of Total | |
Expenditure |
Expenditure |
|||
Personnel Cost | 160,823 | 39.4% | 149,693 | 38.5% |
Subcontracting Expenses | 166,886 | 40.9% | 170,368 | 43.8% |
Operating and Other Expenses | 66,618 | 16.3% | 53,309 | 13.7% |
Depreciation | 8,149 | 2.0% | 8,129 | 2.1% |
Interest | 2,464 | 0.6% | 1,808 | 0.5% |
Impairment of investment in subsidiaries | 2,931 | 0.7% | 5,508 | 1.4% |
Total Expenses |
407,871 | 100.0% | 388,815 | 100.0% |
Personnel cost includes salaries, wages and bonus, contribution to provident fund and other funds, share based payment to employees and staff welfare costs.
Subcontracting expenses include cost of direct contractors and agency contractors to support current and future business growth.
Operating and other expenses mainly include travelling expenses, rent, repairs and maintenance, communication expenses, office establishment costs, software packages and professional fees.
Other expenses also include expenses recognised towards provisions for onerous contracts and provisions for doubtful debts.
Impairment of Investment in subsidiaries
The Company has investments in subsidiaries and associates, which are accounted at cost less any provision for impairment. The Management assesses the operations of the subsidiaries/ entities, including future projections, to identify indications of diminution in the value of the investments recorded in the books of accounts.
Based on the performance of subsidiaries and relevant economic and market indicators, the Company has reassessed the recoverable amount in subsidiaries as on 31st March, 2024.
Since the recoverable amount was lower than the carrying value of investments, the Company has recognised impairment loss of Rs. 2,931 Mn for FY 2023-24.
Profit before tax
Profit before tax was Rs. 25,647 Mn in FY 2024 compared to Rs. 49,041 Mn in FY 2023. Profit before tax as a percentage of total revenue is 6.1% in FY 2024 compared to 11.5% in FY 2023.
4. Income taxes
The provision for income tax for the year ended 31st March, 2024 was Rs. 4,361 Mn as compared to
Rs. 11,266 Mn in the previous year.
The effective tax rate in these years was 17% and 23% respectively.
5. Profit after tax
Profit after tax was Rs. 21,286 Mn in FY 2024 as compared to Rs. 37,775 Mn in FY 2023.
Profit after tax as a percentage of revenue is 5.1% in FY 2024 and 8.9% in FY 2023.
Consolidated PAT
Consolidated PAT for FY 2024 is Rs. 23,578 Mn as compared to Rs. 48,313 Mn in FY 2023. PAT as a percentage of revenue is 4.5% in FY 2024 & 9.1% in FY 2023.
C. CASH FLOW |
||
Particulars |
FY | |
2024 | 2023 | |
Net cash generated from operating activities | 50,053 | 41,021 |
Net cash generated from/(used in) investing activities | 472 | 6,768 |
Net cash from/(used in) financing activities | (47,273) | (49,915) |
Net increase/(decrease) in cash and cash equivalents during the period |
3,252 | (2,126) |
Effect of exchange rate changes on cash and cash equivalents | (40) | 571 |
Cash and Cash Equivalents at the beginning of the year | 10,940 | 12,495 |
Cash and Cash Equivalents at the end of the year |
14,152 | 10,940 |
D. IN ACCORDANCE WITH THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS 2018) (AMENDMENT) REGULATIONS, 2018, THE COMPANY IS REQUIRED TO GIVE DETAILS OF SIGNIFICANT CHANGES (CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FY) IN KEY FINANCIAL RATIOS
Sr. No |
Key Financial Ratios 1 | FY 2024 | FY 2023 | % Change |
1 | Debtors Turnover | 4.3 | 4.2 | 1% |
2 | Inventory Turnover | NA | NA | |
3 | Interest Coverage Ratio | 5.4 | 15.7 | -66% |
4 | Current Ratio | 1.9 | 2.1 | -8% |
5 | Debt Equity Ratio 2 | 0.02 | 0.02 | -14% |
6 | Operating Profit Margin (%) | 4.4% | 10.6% | -58% |
7 | Net Profit Margin (%) | 5.1% | 8.9% | -43% |
8 | Return on Net worth | 8.8% | 14.7% | -40% |
1. Ratios are based on Standalone Financials
2. Debts include lease liability
Reasons for movement in ratios greater than 25 % Interest coverage ratio: The decrease in interest coverage ratio is on account of decrease in earnings Operating profit margin: The decrease in operating margin in FY2024 is on account of decrease in revenue and increase in operating expenses Net profit margin: The decrease in net profit margin in FY2024 is on account of increase in operating expenses Return on net worth: The decrease in this ratio is due to decrease in Profit after Tax.
E. INTERNAL CONTROL SYSTEM
The Company maintains an adequate internal control system, which provides, among other things, reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against significant misuse or loss of Companys assets. The Company uses an Enterprise Resource Planning (ERP) package, Business Intelligence and Analytics package, which enhances the internal control mechanism. The Company also has a Chief Information Risk Officer (CIRO) and Chief Information Officer (CIO) for overseeing the Internal Control and Systems.
F. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES INCLUDING NUMBER OF PEOPLE EMPLOYED
Being an organization that focuses on staying on the cutting edge of technology, through our people, we strive to attract the best talent through intensive recruitment drives in premier engineering and management institutes. During the year, TechM saw decrease of 6,945 professionals. The global headcount of the Company as on 31st March, 2024 was 145,455 as compared to 152,400 as on 31st March, 2023.
The LTM IT attrition was 10.0% during the year as compared to 14.8% in the previous year. The Company has been working towards retaining talent by investing in career development programs, talent engagement initiatives, employee well-being (personal and professional), rewards and recognition as well as an empowered work environment.
Cautionary Statement
Certain statements made in the Management Discussion and Analysis report relating to the
Companys objectives, projections, outlook, expectations, estimates and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections and so on, whether express or implied. Several factors could make a significant difference to the Companys operations. These include economic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on, over which the Company does not have any direct control.
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