IT services firm Tech Mahindra's Managing Director & Chief Executive Officer CP Gurnani urged his management team to meet every month instead of quarterly basis to respond to the market trends, amidst macro-economic uncertainties. While the executive remains on bullish on the overall demand environment, decision making by clients is taking time, he said while reporting the company's Q3 earnings numbers.
During its Q3FY23 earnings announcement on January 30, Gurnani said: "Given the current environment, I expect Tech Mahindra to be an agile organisation. By an agile organisation I mean, budgeting, hiring and overall management of operational metrics will be discussed every month. I expect the management to meet every month and respond to the market trends, instead of every quarter."
The IT services firm reported net new deal wins worth $795 million for the third quarter ended December 31, 2022, up by 13 percent YoY. This was driven by deal wins in the cloud engineering, healthcare and telecom segments.
Net new deal wins stood at $704 million in the same quarter last fiscal year. Sequentially, deal wins were up by 11.03 percent from $716 million in the last quarter.
In Q3FY23, Tech Mahindra for the first time reported $1 billion in quarterly revenue from its Enterprise vertical. Known predominantly for its Communications, Media and Entertainment (CME) vertical, the company called this a milestone for the quarter. CME, meanwhile, clocked $665 million in quarterly revenue.
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Gurnani said, “CME has grown 1.9 percent QoQ, and enterprise has grown 1.8 percent QoQ. Our BPO business continues to be the largest and fastest growing business, having a growth of about 21 percent in Q3. The BPO sector has had a very strong quarterly performance.”
He added, “Considering that there was a soft macro environment, geopolitical winds are not settled and it is traditionally a slow quarter, I am happy with Tech Mahindra’s Q3 performance. I can attribute this to our focus in customer experience management, customer centricity and investments in 5G, and overall CME continuing to pivot the growth.”
Rohit Anand, CFO, Tech Mahindra added, "Within the Enterprise vertical some of the sub-segments driving the growth are hi-tech; and verticals around retail, transport, logistics and manufacturing have come back to growth after few quarters of tepid performance.”
Gurnani believes while the demand remains strong, the decision making will be slow overall among clients, especially in the areas of discretionary spending.
In a separate statement, Gurnani had called out the moderation in growth in the quarter due to tough macro-economic environment.
Speaking with Moneycontrol earlier this month during the World Economic Forum in Davos, Gurnani had said that based on his client conversations and 50-odd meetings that he attended, he didn’t particularly expect the way forward to be negative thoug,h he’ll remain cautious.
“In terms of how positive it would be, a lot depends on the way US Fed would react. There is always more than one layer that you need to unpeel because ultimately corporates do depend on some indications from the US. Otherwise, the mood looks moderately positive,” he said.
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