After committing more than $955 million (about Rs 7,353 crore) to acquire 10 companies in the immediate past, Tech Mahindra will be less acquired in the new fiscal year and will focus on integrating them, a senior executive at the company said. ‘business.
The Mahindra Group company, with nearly $6 billion in FY22 revenue, will consider acquisitions opportunistically in the new year, its chief strategy officer Jagdish Mitra told PTI.
“The focus will be on putting the systems in place to capitalize on synergies and looking at how the acquired company can help create a broader portfolio,” he said, adding that acquisitions should be incurred to stimulate the core business.
Over the past 18 months, the company has committed $955 million to acquire 10 companies of varying sizes around the world, primarily with the goal of mastering technologies, people or revenue streams, to be one of the more active on mergers. and prior peer-to-peer acquisitions.
Its designated chief financial officer, Rohit Anand, said acquisition-related charges reduced its operating profit margins by 1% because depreciation-related charges had to be booked.
In the new fiscal year, the company will focus on expanding operating profit margins, said Anand, who takes over from June 1, and added that the aspiration is to take the profit margin from operating in the 14-15 percent band of 13.2 percent.
The company has levers that will be deployed to expand the profit margin and grow it sequentially each quarter, Anand said, listing the avenues.
He said the company would consider making deals that would improve its pricing, reap benefits on the usage front as more juniors hired in the recent past were deployed on projects, left companies like those related to governments where it was facing cash flow problems. and divest of investments made in the past, including in companies or geographies in Africa that are performing suboptimally.
Mitra said the company will also continue to seek new centers in the Indian hinterland to serve as delivery hubs, adding to the 15 such facilities already opened in FY22 with the aim of reduce the high attrition rate in a context of increased demand for talent.
The destination of choice will be based on talent availability and other aspects, Mitra said, adding that potential hubs currently being considered are in all areas of the country.
The Tech Mahindra certificate traded up 1.55% at 1,205.95 on the BSE, against gains of 1.76% on the benchmark.