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Revenue
₹12,864 Cr
verified against source
Revenue YoY
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reported change
EBITDA
Pending
latest reported figure
Source
nse xbrl
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Tech Mahindra reported Q2 FY24 revenue of INR 12,864 crore, down 2.2% QoQ, with EBIT margin at 4.7% (down 200bps QoQ) due to revenue decline and business rationalization costs. Large deal TCV was $640 million, improving from last quarter but deal cycles remain elongated. The company is undergoing a major reorganization effective January 2024, splitting into six SBUs to drive client intimacy and operational efficiency. Management guided that rationalization actions will continue in Q3, with a clean slate expected by Q4. Medium-term margin and revenue plans will be shared in April 2024. Key risks include prolonged weakness in telecom vertical (37% of revenue) and potential further margin pressure from restructuring costs.
Colored figures show movement against the previous available record.
Guidance to track
- Management intends to complete portfolio rationalization by Q3, with one-time costs expected to normalize margins by Q4.
- New CEO Mohit Joshi will present detailed plans for margins, revenue, and organization structure in April 2024.
- Six strategic business units will be created to improve client intimacy and operational efficiency.
Risks flagged
- Telecom vertical (37% of revenue) continues to decline with no near-term recovery expected, as 5G spending remains slow.
- Exceptional items of 260bps impacted Q2 margins; further one-time costs may arise in Q3 from portfolio rationalization.
- Top 5 client revenues have declined ~30% over six quarters due to wallet share loss and non-core business exits.
- Despite healthy pipeline, deal closures are taking longer, which could delay revenue recovery.
Key quotes
- We are now halfway through what would reasonably be called as one of the toughest years for IT services.
- I do want to admit that we had not budgeted enough for this slowdown.
- We will be ready sometime in April to come to you with three sets of plans: a plan for margins, a plan for revenue, and a plan for the organization.
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