- 26 Apr 2024
- ICICI Securities
CEO lays roadmap for Vision 2027, aims for EBIT margin of 15% in FY2027
TECHM - 1262 Change: 11.80 (0.94 %)News: Tech M in Q4FY24 reported revenue of US$ 1,548 mn, down 1.6% QoQ while in CC terms it declined by 0.8% QoQ. In rupee terms the revenue came at INR 12,871 crore, down 1.8% QoQ. Region wise RoW (25% of mix) grew by 1.2% QoQ while America (50.8% of mix) & Europe (24.2% of mix) declined by 3.7%. Segment wise BFSI (16.3% of mix) grew by 3.5% QoQ while CME, Manufacturing & Retail declined by 2.7%, 1% & 9.6% respectively. EBIT margin of the company increased by 200 bps QoQ to 7.4%, (grew 40 bps compared to adjusted margins of Q3). The company during the quarter won TCV of US$ 500 mn, up 31.2% QoQ. The company’s net employees during the quarter declined by 795 to 145.5 k and attrition was steady at 10%. The company declared final dividend of INR 28 per share. For FY24 the company reported revenue of US$ 6.3 bn, down 5% (4.7% in CC terms) and in rupee terms the revenue declined by 2.4%. The company’s EBIT margin in FY24 came at 6.1%, down 530 bps while PAT margin came at 4.5%, down 460 bps. The company in FY24 won TCV of US$ 1.9 bn, down 35.3%.
Views: The company’s performance in fiscal year was impacted by weak macros and the new CEO Mohit Joshi after taking the helms has started implementing structural changes to begin the recovery journey of the company. The CEO has set an ambitious roadmap of Vision 2027 for the company wherein it is aiming for predictable revenue growth & improving margins. The CEO mentioned that it expects the company to achieve EBIT margin of 15% by FY27 & revenue growth higher than peer group for which it will be making investments each fiscal year. We believe that the roadmap set by the new CEO is ambitious and the execution will be over longer period whose results will be gradual.
Impact: Neutral