A specialist in digital transformation, consulting, and business re-engineering services, Tech Mahindra defers salary hikes for senior employees due to a huge drop in net profile in Q1FY24.
The decision follows as the quarter nose-diving profits and EBIT margins decline. The company’s EBITDA at USD 163 mn; down 33.7% QoQ, down 31.8% YoY; Margin at 10.2%, down 460bps QoQ. The Profit after tax (PAT) at USD 84 mn; down 38.0% QoQ, down 41.1% YoY
CP Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra, said, “Our results this quarter reflect the uncertainty in the global economy and the IT sector.”
“We are confident that we have the right strategy and the right team to overcome this temporary setback and deliver long-term value for our customers and shareholders”, CP Gurnani added.
Rohit Anand, Chief Financial Officer, Tech Mahindra, said, “This quarter was a challenging one for us as revenue growth faced strong headwinds and that had an impact on profitability.”
“We have taken swift and decisive actions to address these issues and improve our execution”, Rohit Anand added.
“Wage increments were given out to the majority of the employee base in the first quarter that ended June 30 itself”, he added.
“Majority of the wage inflation is already done in Q1. Only for a certain senior proportion of the employee base, it will happen in the following quarter,” he added.
He further added, “From an increment impact perspective for the quarter, as I mentioned, we did increment for most of the population.”
“The impact was closer to 1.3% in terms of margin, and there is a certain size of the population for whom the increment will happen in Q2. So that’s a smaller impact”, he said.
However, the attrition rate improved to 13 per cent from the 23 per cent in the year-ago period and 15 per cent in the quarter-ago period. The total headcount at 148,297 down 4,103 QoQ.