Stating that Tech Mahindra
has a bias towards using cash
rather than buyback, its Chief Executive Officer (CEO) C P Gurnani said the company will focus on bottomline and is also willing to sacrifice on revenue
growth for it.
"Right now my capital allocation policy is that I will give dividends but at the same time, I need cash
to acquire companies.
That is a better use of capital," Gurnani said on the sidelines of the annual Nasscom
Leadership Forum on Friday.
It can be noted that companies
such as TCS, Infosys, Wipro
are mulling share buybacks as they are sitting on huge cash
piles, which has led to investors demanding either share buybacks or heavy dividend payouts.
added Rs 950 crore cash
in the December quarter, taking the total cash/equivalents to Rs 4,951 crore.
Asked about the increased shareholder activism, as at Infosys
where the promoters have come out criticising the present board and the management, Gurnani said shareholders have a right to know about the affairs of their company and companies
have to answer every such question.
"When it becomes one of the hedge fund managers or one of the promoters, the answers will be the same, it is just that you will have to answer them in public," he said.
Commenting on the recent announcements on buybacks, he said such moves were "overdue" because of the "hoards" of cash
are sitting on.
On business outlook, Gurnani said TechM
will be focusing on the bottomline as well as widening its margins.
"My priority is going to be on Ebitda now because I am lagging behind on this. Our 1,15,000 employees know that I am willing to sacrifice growth for Ebitda," he said.
On the company's low margins, he said, "It does not feel good that I am at 16 per cent and the leader is at 27 per cent."
Gurnani, however, did not spell out any targets, blaming the "turbulent world" we are in, but said there will be an effort to widen the margins every quarter.
Faster growth in non-US markets boosted TechM
net profit by 14 per cent to Rs 856 crore in the December quarter, while margin expanded by 91 bps to 12.41 per cent.