I was just going through some news links and found this related to SAP not sure how much this will affect Tech Mahindra.
http://www.equitybulls.com/admin/news2006/news_det.asp?id=140598
http://www.outlookbusiness.com/article_v3.aspx?artid=290809
Business outlook had this article on techm , good read.
this article is a good eye opener - as we look for growth potential in telecom domain, tech m sees growth potential in BFSI.
As Janit mentioned in previous post, lack ofproprietarysoftware’sis biggest weakness for tech m but things looks to be changing now. quick look at techmas banking solution partners, techm has now alliance with major solution providers in BFSI like Oracle, HPS, Firstdata, and even market data providers like reuters, bloomberg (Oracle flex cube is no 2 player globally in core banking and is ahead of Infyas finnacle n TCS’s baNCS in core banking and used in HDFC) link to list of partner - http://goo.gl/6c867w. also techm has more than one partner in each areas, this may bring more flexibility in terms of product offerings as well as in cost a smallers player in core banking like temenos should locially cost less and can be offered to smaller banks. Recent jump in BSFI client addition maybe attributed to these alliances.
Opportunity for techm could be very large if co manages to bundle these solutions and able to arun the businessa for clients. Luckily that has been the strategy for techm.,
aThe strategy is creating a differentiator and bundling together with the intellectual property and platforms, it has helped us disrupt some incumbents, the Tier-I providers,a said Vasantraj. aIf you look at our order book and pipeline, it is at an all-time high."
Managed Data Service (MDS) is an excellent eg demonstrating techmas ability in executing this strategy and has won major client UBS for its MDS. As per website _aManaged Data Service bundles several modules for Instrument Static, Instrument Pricing, Corporate Actions and Taxation Data with an underlying software and hardware infrastructure as well IT & operations teams to provide maintenance, support, change management, data operations and data governance._a
Iam also attaching an interesting chart that appeared in phillipcapital research report a graph represents dominance of IBM in telecom domain, and the reason why IBM dominates is due to if ability to offer end to end solutions and arun the businessa for the client eg. Airtel, idea deals in india is very good eg. these deals are typically bigger and higher margin than piecemeal deals which Indian IT cos win generally.
Personally Iam quite impressed by this strategy of bringing in partners and its less risky and time consuming than building new proprietary s/w from scratch and bundling it a maybe this is where entrepreneurial spirits and vision of Anand Mahindra come handly.
Note: wipro too has similar strategy of borrowing 
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correction: temenos and orcle flexcube are leaders in core banking domain globally, by mistake i mentioned it as smaller player.
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http://www.business-standard.com/article/companies/techm-bets-on-financial-services-114062000997_1.html ofproprietarysoftware’sis
Hi Augustine,
My view is that such alliances for something like Indian IT companies are a must as they lack the Proprietary softwares/ Product based IPs. And all the Indian IT companies (Infys, Wipros, HCLs, TCSs, L&T Infotechs, etcs., Cognizant included although on paper its not an Indian IT company) have such alliances.
Such alliances are not a differentiator as they are more of ‘MUST HAVES’ for all service providers/vendors and which therefore act more like an eligibility criteria for Indian IT companies to be able to bid for such projects.
Without such alliances Indian IT companies would not be able to expand their service offerings and would not be in a position to provide comprehensive solutions to meet the client demands.
TechM’s BFSI vertical would definitely keep growing as it is as of now a small contributor within the overall revenue of TechM and has a small base. Also it should be able to get a foot in the door of various BFSI clients (partially 'coz of its focus and initiatives, tapping Satyam’s past relationships, improving business scenario for BFSI clients themselves, somewhat 'coz BFSI clients are more conscious then ever before with respect to their vendor management and prefer spreading their risks between multiple vendors,etc.,.).
The main challenge for TechM would be how does it further penetrate into these Account/Logo wins.
More often than not for, specially for Indian IT companies, Client Engagement at various levels turns out to be one of the most important factors. And I feel TechM would definitely be working towards it and other initiatives (after all it has examples of Infys and Cognizants of the world in front of it 
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Cheers!!!
This article is a good eye opener - as we look for growth potential in telecom domain, tech m sees growth potential in BFSI.
Usually Indian IT companies have BFSI clients providing them with40-60% of their revenues. 10% for Tech M is too low. Hence them looking for growth in BFSI is justified and possible too.
With 47% of its revenues coming from Telecom, Tech M will show disproportionate growth only if
)- Conditions in the Telecom domain improve.
)- Companies like Comviva are bought or new proprietary products created
Disclaimer:- Invested
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Highlights of the call by Capital mkt: The Consolidated Revenues grew by 1.3% QoQ (24.8% YoY) to Rs 5122 crore for the quarter ended June 2014. However, Operating Profit down by 13% QoQ to Rs 928 crore during the quarter. But the PAT was up by 2.7% QoQ to Rs 631 crore. In USD terms, The Revenues grew by 3.6% QoQ (18.1% YoY) to USD 855 million for the quarter ended June 2014. However, Operating profit was down by 12% QoQ to USD 155 million. But PAT was up by 4.3% QoQ to USD 105 million for the same period. In cc terms, the revenues grew by 2.9% and 0.7% is due to the cross currency during the quarter.The margins are impacted due to the rupee appreciation (50 bps), visa costs (100 bps), business mix and transition costs (80 bps), BT amortization (30 bps) and lower utilizations (50 bps) during the quarter. The H1B Visa costs are one-off during the quarter.The BT revenues declined during the quarter. Also, The ROW markets declined during the quarter due to one for the shorter project in Nigeria comes to the end.The pricing is stable during the quarter. It signed TCV's of USD 250 million during the quarter. These are the new deals in the existing and new accounts during the quarter.The active Client count stood at 632 in Q1 vs 629 in Q4FY14.The Total headcount at 92,729 as on 30thJune 2014; adds 3,288 professionals during the quarter. The Software headcount stood at 64,095; BPO at 21,936 as on 30thJune 2014. The Utilization declined to 72% in Q1'FY15 compared to 74%in Q4'FY14. However, the lower utilizations are due to the seasonality.The Onsite: Offshore mix skewed to the onsite due to more managed services engagement which requires onsite centric roles. In the near term also it will see further increase and may stabilize afterwards. The Key margin lever is going to be utilization going forward.The Capex is USD 43 million during the quarter.The Consolidated Debt at Rs 86 crore as of June 30 2014, repaid debt of Rs 277 crore during the quarter. The Cash and Cash equivalents are at Rs 3,669 crore as of June 30, 2014. |
A big reason for visa costs is also employee churn. If employees keep leaving the firm, newer employees need to apply for visa again.
TechM AR says attrition rate is worsening. Last year it was 16% and now it has jumped up to 18%. If you compare this with, say, Infosys, this seems ok, but if you compare this with, say, mindtree, note that mindtreeAR says they have around 12.7% employee churn, and it has actually decreased from 13.4% to 12.7%.
For the knowledge sector, retaining employees is the key. Training costs, visa costs, and costs for an employee to ramp-up on relevant knowledge areas are very high.
Disc: Long on Mindtree, no position in TechM or Infosys.
Tech Mahindra has some of the worst HR policies amongst the larger Indian IT companies. And the surprise here is that they inherited some of the most liberal HR policies from British Telecom way back in 2004-5. Satyam also had pretty decent employee friendly policies.
I was always sceptical of both Tech M and Satyam for this very reason. But I have now invested in Tech M because of their USPs:
)- India’s best Telecom Systems Integrator
)- Satyam having India’s best SAP/ERP talent
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Highlights of the call by CapitalMkt: In USD terms, The Revenues grew by 5.2% QoQ (up by 18.7% YoY) to USD 900 million for the quarter ended September 2014. Also, EBITDA grew by 16.1% QoQ to USD 180 million for the same period. Further, PAT grew by 12.2% QoQ to 118 million during the quarter.The margins improved on the back of lower wage costs, rupee depreciation, higher utilizations and SG&A leverage during the quarter. It continues to remain focused on improvement in margins going forward.The growth was led by communication and Manufacturing vertical during the quarter. The Revenue from Telecom grew by 8% QoQ, MFG grew 4.7% QoQ and Retail grew by 4.6% QoQ respectively during the quarter.The Enterprise grew by 2.9% QoQ during the quarter.The America grew by 10.2% QoQ Europe grew 5.6% QoQ, but RoW decline by 5.9% QoQ respectively during the quarter.The Active Client count increased to 649 in Q2'FY15 from 632 in Q1FY15.It has won 3 large deals (all from MFG vertical) during the quarter.The top 5 clients and Top 10 clients were grown during the quarter.It continues to pursue 8-10 large deals at any point time. Further, it indicated that it continues to focus on large deals. The incremental TCV deal wins are USD 270 million during the quarter.The base telecom deal is going as per the plans.The North America geography for communication vertical continues to be robust during the quarter.The Total headcount is at 95,309 as on 30thSeptember 2014 and adds 2,580 professionals during the quarter. The Software headcount stood at 66,175; BPO at 22,433 as on 30thSeptember 2014. The utilization is long term lever going forward. It has over 3000 campus recruits in the training as on 30thSeptember 2014.The utilization of 76-77% is historically high but indicated that it can push it further.The attrition increased from 16% in Q1'FY15 to 18% in Q2'FY15. It indicated that taking steps arrest the attrition rise.The management remains optimistic about outlook and indicated that it is in right direction. The across industry Q3 will have furloughs and telecom and TME will be impacted.The debtors days are remained at 102 in Q2'FY15.The Cash and Cash equivalents were at Rs 3,434 crore as of 30thSeptember 2014. |
Received buyback tender form by e-mail. Buyback price is 950/- vs. 780/- cmp.
Harshvendra Soin, Global Chief People Officer and Head of Marketing, Tech Mahindra, said the following:
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“The ‘Big Reset’ has three phases. The first phase is ‘Survive’, which has already happened and where we have used our existing infrastructure to ensure there was business continuity. The second phase is ‘Revive’ – the current stage – where we are reintegrating the workforce by making improvements related to social distancing. In the third phase, which is ‘Thrive’, we will have to reimagine the workplace with sign-based workplace solutions that deliver touchless work experience.
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The first big shift will be from shared devices to personal devices. Touch will be replaced with voice, gesture and facial recognition, especially in terms of safety and social distancing this will be the key enabler. At Tech Mahindra, in 2019, we had already introduced K2 which is our humanoid which responds to employee queries around the globe. We also have a facial recognition system, which apart from including our daily emotion analysis, takes our attendance too through facial recognition. Our chatbot UVO has been taking care of everything which has to do with first level recruitment, filling up your travel vouchers applying for leaves and so on.
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We also have a virtual onboarding app — DOVE — that does virtual tours, leadership videos and also enables all the joining documentation for people. Even during the current crisis and prevalent social distancing norms, we have also come out with various apps like the ‘BookMySeat’ app and a Cafeteria/Canteen app. We have been recognised as one of the 50 Best Companies to Work for in 2020 by the Great Place to Work Institute for our employee friendly initiatives and people first policies recently.”
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@sujay85 ji, I really appreciate your effort - I wish to know how You keep track of news on so many companies across different sectors? It’s very helpful. Thanks.
Glad that you found it helpful.
Most of the news that I post on this forum came up on the Google News feed and some accidentally via different search.
Easiest way to track news is to set up Google news alerts which I have setup on select companies only.
This news on Tech Mahindra came up accidentally and it’s a bit dated news.Tech Mahindra is on my radar due to its focus on 5G implementation. After RIL’s landmark announcement on indigenous 5G technology build up, I thought that Tech Mahindra might become a capable software partner of theirs being also home grown. The search result didn’t reveal any of those but came to know other interesting news which I posted here.
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Tech Mahindra is over exposed to telecom with 40% revenue from it… Over dependence is too bad…Telecom is futuristic but a slow business…
No wonder… their q4 2020 was poor…the stock was beaten down …not sure how q1 2021 would be …
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Somewhat true but they are specialists here and being a specialist helps in winning tenders. Telecom sure is a slow sector but it is a steady one too, with long runaway. In fact I find it better to use Tech Mahindra as a proxy to play telecom theme than invest in a telecom only players like Bharti or Vodafone-idea which are saddled with debt issues and in a highly competitive field.
No wonder Tech Mahindra’s profits are somewhat lumpy but its good dividend yield somewhat makes up for it.
Regardless, the digital offerings of Tech Mahindra seem to have gathered steam (organically & also through acquisitions) and is currently around 35% of revenues. So, with higher growth in this vertical the telecom dependence will only reduce going forward.
Another interesting focus area of Tech Mahindra with wide promise is cybersecurity. With more companies going digital the importance of cybersecurity is only increasing day by day.
Lastly, with Government’s plan on putting a ‘ban’ on Chinese 5G equipments, the prospects of Indian 5G players look brighter. With Tech Mahindra having proven capability in this segment it is very likely that they will become the partner of choice for software implementation. The partnership of ITI with Tech Mahindra is only a testament to that thesis. How well this will pan out is anybody’s guess, though.
Disclosure: I am a tech savvy person but not too conversant with the lingo’s used in IT companies AR. So, I invest in IT companies mainly through Franklin Technology Fund. However, currently evaluating Tech Mahindra as a direct investment candidate. I have high regards for the Mahindra Group & trust its corporate governance. Feel free to correct me if I have gone wrong in my above assessments.
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Your views are absolutely correct… I have nothing to add as you have analysed nicely…
Mahindra and Tata are good brands … top on corporate governance…no one can beat…but at the same time not growth hungry… Look at Tata Motors & Mahindra & Mahindra…even TCS not doing so good last few quarters…not to our expectations… Leaders should not talk about headwinds on hindsight… They should foresee headwinds much before than it actually occurs and take actions in advance to mitigate risks…How Infosys is doing better … Why not TCS?
Why Escorts do better than Mahindra & Mahindra on tractors, M&M supposed to be leader in tractor, though they have a CV portfolio.
Discl: Invested in Infosys, LTI & HCL technology … A small tracking position in Tech Mahindra… waiting for q1…and take a call to increase holdings !
I am not a sebi registered stock advisor
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Mahindra University (MU) will drive interdisciplinary learning, integrating the study of science and technology with humanities, ethics, philosophy and design.
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As part of the immediate road map, the university will launch the School of Management (2021-22), School of Law (2021-22), Indira Mahindra School of Education (2021-22), School of Media and Liberal Arts (2022-23) and School of Design (2023-24). MU includes the Ecole Centrale School of Engineering that was set up in 2014.
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Mahindra University is part of the Mahindra Educational Institutions (MEI), a not-for-profit subsidiary of Tech Mahindra. The university is being planned to be a platform to balance education with real-world experience through entrepreneurial projects to solve complex challenges facing society.
Tech Mahindra has started a COVID-19 screening service ‘Mhealthy’. The platform is clinically tested and compliant with all government-mandated regulations, guidelines, and has been approved by the Central Drugs Standard Control Organisation. The service is available for ₹1,200 per person. The Mhealthy team will visit premise of societies and companies for the screening with portable devices and trained nurses for the service.
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The Mhealthy service comprises over 32 screening tests on a single platform and detects antibodies with 96% accuracy. It not only does an instant risk assessment on COVID-19, but also additionally screens multiple factors like hypertension and blood glucose that may contribute to risk. The company claims this assessment to be more comprehensive than COVID-19 antibodies test or antigen test.
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The Mhealthy platform will categorize individuals opting for the screening as L1, L2 and L3. L1 means that the person is healthy. L2 means the person has had some exposure. If the person is L3 then the person is most likely to be a COVID-19-positive case. Once the result is out, the person can follow up with doctor consultation through an app.
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