Tech Mahindra buyback more a capital allocation decision, independent of business developments: Manoj Bhat

The Rs 1956-crore buyback is up to 2.1% of the company’s equity. It is at a price of Rs 950. Manoj Bhat, CFO, Tech Mahindra, tells ET Now.

Edited excerpts:

Talk to us about the plans that you have for the company. What is making you so confident that you are looking at an attractive buyback?

First of all, the Rs 1956-crore buyback is up to 2.1% of the company’s equity. It is at a price of Rs 950. We should view it as a decision to allocate capital back to shareholders in a manner which is tax efficient for them.

Also, it obviously rewards long-term shareholders for being the company and supporting the company through this journey. Coming to the business prospects, if I look at our view on the market, the demand is firm. The telecom vertical is looking up overall from where it was two-three years ago and the enterprise vertical continues to do well.


So, overall business prospects are fairly steady. The buyback decision should be viewed more as a capital allocation decision and independent of what is happening in the business.

Just update us on what is happening in the business? What are the strategies?

There are two or three key themes here. Of course, from our perspective. the whole strategy around 3-4-3 is working out very well and we are betting on some of the key themes happening in the world of digital and modernisation of technology.

Across customers, we are seeing those trends play out. For example, our digital revenue is up to 33% of rural revenues. It grew in excess of 10% quarter on quarter last quarter and on year on year basis, it is in excess of 30%. Clearly, that is happening from mainstreaming of digital. The last two quarters have seen some of the highest deal wins we ever had. In Q2, deal win was about 550 million, in Q3, it was about 440 million.

The third thing is from a perspective of the telecom vertical or the communications vertical. We have seen growth come back into the vertical and we are seeing a lot of activity and discussions with customers in terms of how to truly modernise and how to use digital technologies for their business benefits.

Lastly, on margins, clearly we have gone through a journey where we have improved margins significantly and the focus on operating metric is something we will continue to do even in the future.