Tech Mahindra Limited · NSE:TECHM
Tech Mahindra — Q3 FY2021 Earnings Presentation
20 slides from Tech Mahindra's earnings presentation, January 2021
Slide 1: Earnings Presentation Q3 FY21
EARNINGS PRESENTATION Q3 FY21 January 2021 Copyright © 2020 Tech Mahindra. All rights reserved.
Slide 2: Q3'21 Snapshot
Q3’21 Snapshot $ 1.31 Bn 13.6% $ 226.0 Mn Revenue PAT margin Free Cash flow 15.9% $ 455 Mn EBIT Margin Net New Deal Wins 2 Copyright © 2020 Tech Mahindra. All rights reserved.
Slide 3: Business Highlights
Business Highlights FINANCIAL OPERATIONAL SEGMENT GEOGRAPHY Revenue Headcount Communications Americas 2.8% 121,901 4.4% 0.1% (cc) (-2357) EBIT % IT LTM attrition Enterprise Europe 170 bps 12% 2.8% 8.5% (2 pp) PAT % Utilization (incl trainees) IT Services ROW 220 bps 87% 2.5% 4.6% (2 pp) FCF to PAT %
Slide 4: Building an organization of the future, the time is NOW
Building an organization of the future, the time is NOW 2014 2017 2018 Copyright © 2020 Tech Mahindra. All rights reserved. 4
Slide 5: Our strategy: NXT.NOW
Our strategy : NXT.NOW TRENDS Big Bets OBJECTIVES 1 EXPONENTIALITY OF CONTENT 1 HUMAN CENTERED EXPERIENCE.NXT RUN BETTER 2 BUSINESS.NXT 2 EXPLOSION OF INTELLIGENT DEVICES 3 PLATFORMS.NXT CHANGE FASTER GROW GREATER 3 POWER OF NEW TECHNOLOGIES 4 CLOUD.NXT Copyright © 2020 Tech Mahindra. All rights res
Slide 6: Management Commentary
Management Commentary CP Gurnani CEO, Tech Mahindra The technology modernization cycle continues to gather pace and our positioning of creating Experiences through Nxt.Now has seen us gain significant traction in the market place. We believe that the Future is Now and we are continuously innovating
Slide 7: Business Update
Business Update Strong traction in Cloud, AI and Addressing urgency in Enterprise Experience, Security transformation Revival in Europe and Manufacturing Focus on Tech Centered Business sector models Nxt.Now Customers ESG Operations Included in Dow Jones Sustainability Offshoring & Utili
Slide 8: Vertical Performance
Vertical Performance Technology, Banking, financial Retail, transport VERTICALS Communications Manufacturing media & services & Others & logistics entertainment insurance % SHARE 39.7% 16.3% 9.4% 16.0% 7.9% 10.8% % QoQ +4.4% +4.2% -0.6% 0.4% +8.4% +3.4% % YoY -9.7% -9.0% +19.5% +17.3% +6.0% -14.5% 8
Slide 9: Net New Deal Wins
Net New Deal Wins Enterprise, 352 Communications, 104 ($ Mn) TCV: $ 455 Mn Chosen by a leading Won a deal with a Selected by an American Engaged by an Indian Communication Service European engineering healthcare company for Aerospace company for Provider in UK for company to transform the digital tr
Slide 10: Strategic Highlights
Strategic Highlights COLLABORATIONS SOLUTIONS LAUNCHED Extended partnership with SAP SE to provide on- premise and cloud-based end-to-end solutions built on SAP® Business Technology Platform to Launched WORKSPACE NXT (Workplace as a customers globally. Service), the latest version of its next-genera
Slide 11: People Updates
People Updates Tech Mahindra has been recognized as a winner of 'People Innovation Category award' winner at ET Innovation Summit for its solution HR humanoid, k2. Tech Mahindra is amongst the only three Indian companies in the global Bloomberg 2020 Gender-Equality Index (GEI). Received Gold Stevie
Slide 12: ESG Focus: Sustainability
ESG Focus: Sustainability Included in the Dow Featured in the CDP A Scored A+ by Constituent of Jones Sustainability List 2020 for both Business World, in FTSE4Good Index Index 2020 under both Climate change and collaboration with Series 2020 the DJSI World & DJSI Water security. Sustain Labs Paris
Slide 13: ESG Focus: Social
ESG Focus: Social Tech Mahindra Foundation has CSR Times Award 2020 Gold Launched Digital Literacy now become the AHA Category for COVID Relief Training Program with Rotary (American Heart Program and Silver Category for India Literacy Mission to train Association)-approved Women Empowerment. 3,000
Slide 14: Management Commentary
Management Commentary Manoj Bhat CFO, Tech Mahindra Our focus on operational excellence has again yielded results as we structurally change our delivery model. We are seeing consistent improvement in our operating metrics and we are confident of continuing on this transformation journey in the comin
Slide 15: Financial Snapshot
Financial Snapshot REVENUE ($ Mn) GROSS PROFIT ($ Mn) EBITDA ($ Mn) PAT ($ Mn) 1,353 430.9 257.2 177.7 1,309 1,265 409.5 230.0 160.6 398.1 219.0 143.7 Q3'20 Q2'21 Q3'21 Q3'20 Q2'21 Q3'21 Q3'20 Q2'21 Q3'21 Q3'20 Q2'21 Q3'21 DILUTED EPS (Rs) FCF ($ Mn) CASH & EQUIVALENTS ROCE % ($ Mn) 14.9 1625.5 13.0
Slide 16: Operational Snapshot
Operational Snapshot HEADCOUNT UTILIZATION ATTRITION REVENUE MIX (including trainees) (Onsite) 130,839 124,258 87% 20% 65.3% 63.0% 121,901 85% 62.7% 84% 14% 12% Q3'20 Q2'21 Q3'21 Q3'20 Q2'21 Q3'21 Q3'20 Q2'21 Q3'21 Q3'20 Q2'21 Q3'21 ACTIVE CLIENTS TOP 10% CLIENTS 50 Mn+ CLIENTS DSO 112 988 997 22 97
Slide 17: Other financial highlights
Other financial highlights CASH CONVERSION TREASURY OTHERS Free cash flow at $ 226 Mn, Hedge book at $ 2.2 Bn compared Tax rate at 24.8% in Q3 FY21, conversion to PAT at 127.2 %. to $ 2.4 Bn in Q2 FY21. similar to 24.6% in Q2 FY21. YTD FY21 FCF at $ 778 Mn, USD / INR Q3 FY21 average compar
Slide 18: Capital Allocation
Capital Allocation MERGERS & ACQUISITIONS • Tech Mahindra to acquire Payments Technology Services Limited a subsidiary of FIS, based in Asia, focused on serving the banking and payment needs of Asian financial services firms. • All transactions are subject to customary regulatory approvals. 19 Copyr
Slide 19: Financial Summary
Financial Summary in $ Mn Q3 FY 21 QoQ YoY Revenue 1,308.7 3.4% -3.3% EBIT 208.6 16.0% 26.4% EBIT % 15.9% Other Income 29.9 90.9% -39.1% Miscellaneous + Interest Income 15.0 Exchange Gain/(Loss) 14.9 Profit Before Tax 232.8 22.4% 12.7% Provision for tax 57.8 Profit After Tax 177.7 23.7% 10.6% PAT %
Slide 20: Copyright © 2020 Tech Mahindra. All rights reserved.
Copyright © 2020 Tech Mahindra. All rights reserved.