Tech Mahindra Management Guidance Tracker

Management aims to reduce subcontracting costs from current 14% to below 10% of revenue over the next few quarters.

Management sees potential to improve offshoring mix by 3-4% in the medium term, which would boost margins.

Management intends to complete portfolio rationalization by Q3, with one-time costs expected to normalize margins by Q4.

CFO stated that 7% EBIT (adjusted) is the operational bottom, with potential for improvement from Q4 onwards, excluding impairment charges.

Management targets exceeding 15% EBIT margins by FY27 through Project Fortius and operational improvements.

Average annual savings of $250 million over three years from cost optimization initiatives.

Management stated they have enough internal levers to improve margins even without revenue growth, prioritizing margin over revenue.

Management reiterated commitment to significant and predictable margin expansion by FY27, driven by Project Fortius and operational efficiencies.

Management expects to reduce subcontractor costs as a percentage of revenue to single digits over time, supporting margin expansion.

Management reiterated commitment to achieving 15% EBIT margin by FY27 through Project Fortius, pricing optimization, and productivity gains.

Wage hikes effective Q4 FY25 will impact margins by 1-1.5%, but operating levers are expected to partially offset.

Management reiterated commitment to 15% EBIT margin by FY27, with linear improvement expected through Project Fortius and portfolio mix.

Despite macro uncertainty, the company reaffirms its FY27 EBIT margin target of 15%, contingent on growth assumptions.

Management reiterated commitment to reaching 15% EBIT margin by FY27, with continued margin expansion each quarter.

Company remains on track to achieve 15% EBIT margin by FY27, driven by continued operational improvements and gross margin expansion.

Management expects first half to be tough but second half to see recovery, driven by deal closures and cost actions.

Management sees continued stress in telecom with no immediate recovery, though the worst of the decline is likely behind.

Revenue growth to exceed peer average by FY27, with FY25 as a turnaround year and gradual acceleration.

Company is on track to hire over 6,000 fresh graduates this fiscal year, with 2,000+ already onboarded in H1.

Management aims to deliver growth higher than peer average by FY27, supported by large deal pipeline and portfolio rebalancing.

Goal to achieve revenue growth above peer average by FY27, supported by deal wins and market share gains.

CFO indicated that the current deal win range of $600M-$800M per quarter is sufficient to support growth targets, with potential to increase if environment improves.

Large deal wins from previous quarters are expected to start contributing to revenue from Q2 onwards.

Management expects improved performance in H2 driven by operational efficiencies and improved demand visibility, despite seasonal furloughs in Q3.

Management aims to increase quarterly net new deal TCV closer to $1 billion, up from current $816 million, driven by a rich pipeline.

Management expects to grow higher than the peer average by the end of FY27, supported by strong deal pipeline and large client momentum.

New CEO Mohit Joshi will present detailed plans for margins, revenue, and organization structure in April 2024.

Management will provide a multi-year turnaround plan including revenue, margin, and investment timelines in the next quarterly call.

Board approved policy to distribute at least 85% of free cash flow over five years via dividends or buybacks.

Management communicated no wage hike currently, will reassess in second half of FY25 based on financial performance.

CFO guided that normalized effective tax rate for the year will be in the range of 26%-27%.

Planned investments in service line capabilities, ecosystem, and talent, including consulting and AI, with ~1% margin impact from wage hikes and investments.

CFO guided that the effective tax rate for FY26 will be around 27%, normalizing from a one-time refund in Q4.

Board recommended dividend of INR 15 per share; committed to returning at least 85% of free cash flow to shareholders.

Six strategic business units will be created to improve client intimacy and operational efficiency.

COO stated plan to train all IT professionals in AI/GenAI capabilities over the next fiscal year.

TechM will continue investing in GenAI capabilities, including sovereign LLMs, agentic AI, and partnerships with NVIDIA, AWS, and ServiceNow.

Investments under Project Fortius (1.5% of margins) will be slightly more in H2 vs H1, but not materially different.

Management expects FY26 revenue growth to exceed FY25 levels, driven by deal conversions and stabilization in key verticals.

The $500M+ European telco deal will start ramping in the first half of FY27, contributing to revenue growth.