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- 25 Jan 2024
- ICICI Securities
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LONG ROAD AHEAD FOR RECOVERY, STRATEGY FOR GROWTH TO BE CALLED OUT AFTER FISCAL YEAR ENDS
TECHM - 1577 Change: -25.80 (-1.61 %)News: Tech M in Q3 reported revenue growth 1.1% QoQ in CC terms while in dollar terms it reported revenue of US$ 1,573 mn, up 1.2% QoQ against the street expectation of revenue decline due to certain one off revenues. Vertical wise Manufacturing & Retail reported sequential growth of 2.9% & 6.4% respectively while CME, BFSI & Hitech declined by 0.3%, 2% & 2.9% respectively due to furloughs impact. Geography wise Americas region (51.9% of mix) declined by 1.5% QoQ while Europe & RoW grew by 2% & 6.3% QoQ respectively. EBIT margin of the company increased by 70 bps QoQ to 5.4% while adj. margin excluding the portfolio rationalizing activity came at 7%. TCV for the quarter came at US$ 381 mn, down 40.1% QoQ. Total headcount of the company declined by 4,354 to 146,250 in Q3 largely due to decline in BPO employees while attrition declined by 100 bps QoQ to 10%.
Views: The company’s overall performance was weak on both the revenue & margins front which was expected in a seasonally weak quarter in the current challenging macro environment. The company mentioned that it still faces near term challenges as it continues to restructure & realign the organisation under the new leadership of its CEO Mr. Mohit Joshi who has recently taking helms of the company. The company’s immediate focus is on margin expansion and indicated that the margins have bottomed out. With the deal TCV remaining weak the forward growth outlook strategy and margin expansion will be keenly watched out which the management will share in next earnings call after end of fiscal year.
Impact: Negative