Tech Mahindra to return to growth track in few quarters: Anand Mahindra

MUMBAI: Tech Mahindra shareholders should not worry about the temporary loss of momentum and margins as past investments will put the company back on growth track, chairman of the company Anand Mahindra said at the company’s annual general body meeting.

TechM, part of the Mahindra Group conglomerate, has seen margins fall over 500 basis points and growth slow to practically a halt in the last two quarters, as the company’s acqusitions took their toll.

Over the last financial year, the company bought banking technology firm SofGen and networking services firm Lightbridge Communications Corporation, which have lower margins, hurting overall profitability

“However, our philosophy has always been that it is good business to acquire assets that add significant value through expanded reach and global delivery capacities. We believe that the long term effect of such acquisitions will be to improve the operating metrics,” Anand Mahindra said.

Mahindra added that the company had built a strong business that would not be shaken by a temporary loss of momentum.

“Our continuous investments over the years in the Company’s people, processes, competencies, geographic reach, digital technologies, platforms, innovation and automation remain unabated, and will steer the company back on the growth track and recover some of the margins after one or two quarters of adjustment,” he told shareholders.

He added that TechM expects digital to contribute over 10% to revenue in the next year. ET had reported that digital had crossed $500 a year on a quarterly annualized basis, earlier this year.