Recently rebadged Mumbai-based Tech Mahindra (see And the new brand is … Tech Mahindra!) kicked off its new FY at a sprightly pace, with headline revenues for the consolidated business in Q1 (to 30th June) reaching $724m, nearly 18% higher yoy and 3.7% higher qoq on a pro forma basis. Operating margins sat at 21.0%, a little down yoy and a little up qoq. Nothing to frighten the horses.
The combination with Mahindra Satyam has changed the shape of Tech Mahindra’s business significantly. North America becomes the dominant region, generating 45% of group revenues vs 35% a year ago. Client concentration – previously heavily skewed by ex-shareholder BT– has ‘derisked’ considerably, with the Top 10 clients now contributing 49% of revenues compared to 82% same time last year. And most importantly, Tech Mahindra now has more than one vertical market, although Telecom is still by far the most dominant, generating 48% of total revenues.
The numbers are just the wrapper of course. It’s what’s under the covers that really counts. Management has had four years to integrate the operations of the two businesses, but I would not be surprised if the band is still marching somewhat to the beat of two different drummers, not quite in lockstep yet.
But they have apparently heeded my concerns on the website, at least to some extent (see New Tech Mahindra can’t shake its heritage). Now when you go to the Tech Mahindra home page and hover over Enterprise Solutions (i.e. the old Satyam business) you get to see the ‘full monty’ range of non-Telecom services. However, now when you hover over Telecom Solutions, you get nada! Oh well, from one extreme to the other – maybe it’ll be third time lucky to find the happy medium.