MD & CEO's Message
If there's one word that aptly describes^! the past two years it's uncertainty. Abusiness climate of constant change drove many companies to shift to "survival]mode" - setting aside larger strategies and investment plans to adapt to the changinglandscape. Customers and the I way they consumed products and services -changed and as aresult so did we.
Companies were forced to introspect adapt and evolve completely transforming the waythey operated and interacted with customers. These changes have triggered thenext-generation technologies of Cloud AI Data IoT and 5G. Companies have beenincreasingly investing in driving revolutionary IT transformation resulting in asustained demand momentum and persistent growth all leading up to a phenomenal FY22.
What Tech Mahindra did
We have made structural changes to transform our operating model and build asustainable growth momentum. We have recorded the highest growth in 7 years whilesustaining margins at 18%. We are building a culture of winning competitive bids againstincumbents and displacing them in renewals. We have increased our win rates wonlarge-deals across business segments.
We are giving emphasis on digital technologies of the future such as cloud networkservices engineering services and experience design services and building our advisoryconsultancy and design offerings on trending digital technologies such as Cloud AID&A and Cybersecurity. We are also doubling our effort on next-gen innovations suchas Meta netops.AI SaaS and Quantum. We are investing in building platform-led offeringsfor our clients across domains such as Factoreal YABX and HealthNxt. We launchedTechMverse our Metaverse platform recently. We have built a robust partner ecosystem andglobal delivery footprint delivering multiple industry-leading use cases to show withrepresentative customers and partners to advocate for us. We are bound to achieve newheights in upcoming years leveraging the big bet we are placing on these innovations.
The sudden and rapid surge in demand led to supply pressure and unleashed a warof talent' especially in Tier I cities with industry hiring and attrition reaching peaklevels. Our strategy was clear: to build capacity and capability at scale. First wefocused on reversing the pyramid. We increased fresher hiring by 3X primarily from tierII Indian cities. Second we augmented our online marketplace community of quality techfreelancers which provides us access to talent on the go. Third we built additionalcapacity in niche skills in nearshore locations like Romania Costa Rica Latvia Belarusand Mexico through our recent acquisitions. Overall in FY22 we added 30k people takingthe total employee strength to 151173.
Strategic mergers and acquisitions complementing our capabilities continued to help usexpand our skill portfolio. In the last 12 months alone we invested ~USD 900 Mn inacquiring assets which will enable us to provide breakthrough values in our clients'transformation journey. The major shift in our M&A strategy was to have a programmaticapproach to acquire niche skilled assets as we were able to bring a greater joint valueproposition to clients resulting in a sustained large and complex deals momentum.
Delivering Solid Performances
Our stellar FY22 performance reflects the broader market and we have almost reachedthe USD 6 Bn annual run rate closing with 17.3% increase in revenue to Rs 446460 Mn (USD5998 Mn). We fulfilled our commitment towards improving large deal wins having raisedour quarterly average TCV to USD 800+ Mn with a total TCV of USD 3.3 Bn in FY22.
We fired on all cylinders delivering healthy growth across every vertical as well askey markets. Enterprise vertical grew by 17.4% while the CME vertical grew by 17.2%year-on-year led by strong order booking in 5G network services. EBITDA margins werestable declining 10 basis points to 18.0% in FY22. Driven by the strong performance theBoard has recommended Dividend of Rs 45 per share for FY22.
Where we are headed
+ We have recorded the highest growth in 7 years while sustaining margins at 18%
+ We have almost reached the USD 6 Bn annual run rate closing with 17.3% increase inrevenue to Rs 446460 Mn (USD 5998 Mn)
+ We are putting our weight behind digital technologies of the future and building ouradvisory consultancy and design offerings on trending digital technologies
+ We are also doubling our effort on next-gen innovations
We believe that if we can imagine the future build the right solutions and run themfor our clients then we're on track to Rise. Our NXT.NOW strategy is built arounddelivering high socio-economic value by generating the right human-centred experiencesenhanced by technology. Its success is evident in multiple large order wins and theCompany being positioned to participate in increased demand.
There is no denying that this demand will continue to stay strong with the majoritycoming from transformation connectivity and network services supply chain of the futureexperiences and engineering. We also focused on Cohesive Account Management wherebywe've merged our experiences across all verticals to deliver NXT.NOW better accountmanagement improved solutions and stellar service offerings. CME will continue to be thelargest vertical with the most opportunities as we focus on building it around valuecreation and impact. BFSI and Manufacturing verticals are close to the billion-dollarannual run rate. We're also increasing efforts in the health and life sciences andhi-tech verticals to propel them in near future.
+ It is said that while good companies are built by profit great ones are built bypeople and purpose
+ People are one of Tech Mahindra's key strengths and we strive to keep themengaged empowered and informed
+ We are the only Indian IT company to score an ARs in both CDP Climate Changeand CDP Water Security and to be listed on the CLEAN CARBON 200 companies for 2021
We have a rare combination of connectivity and experience as our endowment which alongwith our big bets on Cloud and Engineering form our winning strategy for FY23.Modernising networks has been our legacy for over 25 years. Through Experience DesignServices we have built award-winning and industry-leading capabilities in human-centricdesign. We will scale our hyperscalers partnerships on building dedicated practices andcreating verticalised and edge use cases. We have a full spectrum of engineering offeringsto deliver values to our customers utilising our cutting-edge and awardwinning solutionstools and frameworks.
The 3Ps (Purpose People and Performance) and beyond
It is said that while good companies are built by profit great ones are built bypeople and purpose.
As a Company we have increasingly realised that operating with the right purpose iskey to gaining the trust of stakeholders and ensuring long-term sustainability. At TechMahindra we challenge conventional thinking and innovatively use technologies to driveproductivity and growth improve quality of living and facilitate a positive sustainablechange - it is this purpose that binds us together. While we strive to become morepurpose- driven and people-centric we ensure that we're performance-led in all that wedo and our pace in this journey has only accelerated in FY22.
Our environmental efforts continue to win global appreciation and recognition. We arethe only Indian IT company to score an ARs in both CDP Climate Change and CDP WaterSecurity and to be listed on the CLEAN CARBON 200 companies for 2021. In our efforts tocombat climate change we aim to become Carbon Neutral by 2030. Additionally we havejoined the 1.5? Supply Chain Leaders by the Exponential Roadmap Initiative (ERI) toreduce GHG emissions across the value chain. When it comes to the fight against COVID-19our CSR wing Tech Mahindra Foundation has been on the frontlines showcasingextraordinary effort and impacting more than 25 lakh lives since March 2020.
People are one of Tech Mahindra's key strengths and we strive to keep them engagedempowered and informed by building a workplace that rests on both empathy andproductivity. Our priorities lay in ensuring our workforce is future-ready throughskilling upskilling and reskilling. We've also achieved the milestone of 34% femalerepresentation and stand proudly amongst the most diverse and inclusive employers. Ourrobust Al-driven automated performance management system also helps us improve day-to-dayoperations and course-correct when needed ensuring that results are never compromised.
Message to Stakeholders
On behalf of the Board I thank all our stakeholders for their unwavering support andbelief in us. We also thank our customers for entrusting us to build solutions for theirmission-critical systems and are grateful for our people who have rallied together to helpthe Company deliver exceptional performances across the last few quarters. We reiterateour commitment towards disciplined capital allocation and returning cash as we continue togenerate higher free cash flows.
I would like to reiterate that our focus is on delivering sustainable growth andcreating value for all our partners. We have a unique endowment ambitious big bets andthe right strategic pillars to make it happen. All of this is driven by our purpose thatis deeply rooted in ESG which is at the core of everything that we do. We've built a greatcompany with purpose and with your support we will continue to soar to greater heightsand build a sustainable future for all.
|C P Gurnani |
|Managing Director & Chief Executive Officer |