Creating a Company with a Purpose
Last year we commenced on a journey of transformation where we relentlessly focused onexecution while maintaining our goal of being a Next Gen Services Partner throughTechMNxt. It is with great pride that we look back at our FY19's digital transformationjourney. We had a significant uptick in our digital share our digital revenues registereda growth of over 41% annually and we were recognized with one of the biggest rankingsworldwide - listed among the top 15 companies in the Forbes Digital 100 a ranking oforganisations that are shaping the digital economy. Your company was also thehighest-ranked non-US company in the list.
Partner Ecosystem: Grow beyond the sum
Technology drives demand and demand drives more technology. We live in a world wherecustomer needs are getting more specialized more complex and collaboration is the key tomanaging this new ecosystem. Today through TechMNxt we work with some of the beststartups in emerging technology areas like Artificial Intelligence Machine Learning IoTBlockchain and many others. Our rich partner program enables adoption of assortedtechnologies creating better solutions and services for customers and more importantlypaving the way for collaborative disruption.
We had a satisfactory year with revenue growth coupled with significant marginexpansion. We ended the year with a revenue growth of 12.9% at INR 34742 crores and ourprofit after tax was INR 4298 crores up by 13% from FY18. In dollar terms we ended theyear with revenue of USD 4970.5 Mn representing a growth of 4.2% and constant currencygrowth of 5.8%. This year has been a milestone year in many aspects. We ended the yearwith 290 bps improvement in EBITDA margin over FY18. Our strategy of growing verticalsoutside of Communications has paid off with the Manufacturing vertical now crossing onebillion dollars in Revenue in FY19. With our relentless focus on cash conversion wegenerated a record free cash flows of INR 3708 crores in FY19. We also initiated ourmaiden Share Buyback this year as part of our capital allocation policy. During the courseof the year we saw a turnaround in our communication business with a growth of 3.8% CQGRbetween Q1 & Q4 FY 2019. We continue to expand our industry leading capabilities inCommunication business as we position ourselves to capture the 5G Wave'. We havebeen investing in developing capabilities and partnerships addressing multiple facets of5G roll-out and our investments in Altiostar or Rakuten 5G testing lab are examples of ourcommitment in this area. Our Enterprise business grew at industry rates of 8.0% YoY andgrowth of 9.7% on constant currency basis in FY19. We continue to add capabilities throughacquisitions such as in Inter-Informatics Group and Dynacommerce that are focused onsharpening our abilities in key areas. We also optimized efficiency in our portfoliocompanies while driving synergy deals leading to improvement in growth and margins.
Sustainability : Key Focus
Creating sustainable value and outperforming the competition has never been morechallenging. Empowered customers are defining business on their own terms. Businessleaders need to ask themselves:
How can I increase profitability by doing more with less?
What does it mean to be a responsible business in a digital world?
How can I measure and share a positive impact on society?
To address these we have integrated sustainability into our company's core strategy.Tech Mahindra believes in extending its radius of responsibility beyond immediate benefitto long-term good. At the Global Climate Action Summit 2018 anchored by Mission 2020consortium your Company along with twenty-one global digital powerhouses announced thelaunch of the Step Up Declaration a new alliance dedicated to harnessing the power of thefourth industrial revolution to help reduce greenhouse gas emissions across all economicsectors and ensure a climate turning point by 2020. We are focused on leveragingtechnology to provide green solutions that spur responsible growth and in India we areactively engaged in various Smart City projects in Gandhinagar Kanpur Jaipur and thePimpri Chinchwad belt in Maharashtra. Combined with our global Managed Servicescapabilities and an industry-leading ecosystem of partners we are a single window partnerfor concept to roll out to management for Smart City solutions.
Rise for Good
Tech Mahindra Limited implements all its Corporate Social Responsibility activitiesthrough Tech Mahindra Foundation a Section 25 company (referred to as a Section 8 Companyin the Indian Companies Act 2013). The Foundation's social work currently focuses onschool and higher technical education employability and disability. As on March 312019 the Foundation was running more than 150 projects across 11 locations in India andduring 2018-19 the Foundation impacted over 36723 primary beneficiaries. The initiativesunder the higher technical education are carried out through Mahindra EducationalInstitutions (MEI).
Employability: SMART (Skills for Market Training) is the Foundation's flagshipemployability programme currently at 100 centres and growing. The employability programmetrained close to 19000 youth in 2018-19 who completed their training in various courses.Education: Initiatives in ARISE (All-Round Improvement in School Education) and ARISE+positively impacted 16000 students. We also trained 2493 teachers under the Shikshaantarproject in 2018-19.
Disability: During 2018-19 the Foundation supported 3960 persons with disabilities.SMART+ trained 1477 young men and women and helped them find dignified jobs. ARISE+supported 2483 children with disabilities enabling them to continue with their choice ofeducation. Corporate Volunteering: In 2018-19 31830 Tech Mahindra associates contributed164278 hours of volunteering through a robust corporate volunteering programme acrosslocations.
Company With a Purpose
Finally I wish to share that our journey towards being and becoming a Company witha Purpose found new strengths as we adopted sustainability as a way of life and madepeople embrace greater responsibility at Tech Mahindra this year. 2018-19 returned ushundreds of stories of TechMighties coming forward in the areas of corporatesustainability as well as corporate and individual social responsibility. We have beenable to both do well and do good and earn recognition and appreciation for that. Whetherit is sustained efforts in the areas of green and blue focused efforts in schools andskills as a Company or personal acts of responsibility in everyday life we have beensuccessful in building a better world than the one we found. It is one of the mostsatisfying humbling and gratifying aspects of what we do at TechM.
I sincerely thank all our stakeholders our customers our employees and ourshareholders for their unstinting support and guidance. As I look into the new Fiscal19-20 I am excited about the disruptions that lie ahead and the opportunities that yourcompany can leverage.
C. P. Gurnani
Date: May 21 2019