Tech Mahindra’s CP Gurnani Insists on Monthly Meetups Amid Profit Loss

In FY23 Q3, Tech Mahindra recorded a 5% decline in its quarterly profit, citing a challenging economic climate. The IT firm's net profit for Q3, ending December 31, 2022, was INR 1,296.6 crore, down from the previous year's INR 1,368.5 crore.

Touching upon the decline of its quarterly profit, Rohit Anand, chief financial officer at Tech Mahindra, suggested the tremendous supply-side pressure as the main reason. Additionally, Anand believes that inflation and cost impact was the biggest driver from a margin perspective.

Tech Mahindra's Q3 revenue from operations was INR 13,734.6 crore, a YoY increase of 20% and a QoQ increase of 4.6%. The company’s reported EBITDA was at INR 2,144 crore, with an 8.1% QoQ and 4.1% YoY growth. 

The company noticed a decline of 3% in its attrition rate, from 20% in the previous quarter, to 17% in Q3 2023. Tech Mahindra Chief CP Gurnani said that while it’s a good thing that the attrition rate has come down, he expects Tech Mahindra to be a more agile organisation. “As an agile organisation, budgeting, hiring, and management of operational matrices should be done every month,” says Gurnani. 

Gurnani expects the leadership team to meet every month and respond to market trends, instead of waiting for quarterly results. At the end of the quarter, the company's headcount totalled 157,068, a decrease of 4.2% (6,844). Despite this, employee costs remained largely unchanged. The headcount reduction was mainly seen in BPS, with a smaller reduction in IT, said Vivek Agarwal, president of BFSI, HLS, and corporate development. According to him, the correlation between headcount reduction and employee cost is possible.