TechM deal pipeline strongest in 3 years

Tech Mahindra Ltd said its deal pipeline was the strongest in three years, as the faster adoption of technology had led to a return of spending in several sectors.

"We are witnessing a wave of new-age technologies being adopted by the customers as businesses across the globe are actively pursuing digital transformation," Managing Director and Chief Executive Officer C.P. Gurnani said. He, however, said the company was not "celebrating" this deal pipeline yet as deal closures were likely to take longer during an uncertain period such as this.

Tech Mahindra is, instead, focusing on imagining and building the future together with its clients, Gurnani told reporters in a virtual press conference.

The company won deals worth $290 mln in the June quarter, of which $105 mln came from the communications segment, and the rest from enterprises.

Analysts had expected the company's deal wins to moderate to $250 mln-$300 mln in the June quarter from over $500 mln a quarter ago.

The spread of the COVID-19 pandemic and the consequent lockdowns enforced globally led to the company's sales falling 6.3% sequentially in constant currency

Bullish code

We are witnessing a wave of new-age technologies being adopted by the customers as businesses across the globe are actively pursuing digital transformation, said Managing Director and Chief Executive Officer C.P. Gurnani, Tech Mahindra.

terms in the June quarter.

Seasonal weakness in its subsidiary, Mahindra Comviva, also weighed on the topline. While three-fourth of the total hit to sales was demand-led, the rest was on account of supply constraints, the company said.

The hit to supply from the company's end was largely from its business process services unit, where sales fell 13% sequentially because of the longer time taken to shift to working from home.

The fall in Tech Mahindra's sales was lower than what analysts had anticipated, leading to its consolidated sales of 91.06 bln rupees surpassing estimates.

The sales fell 4% sequentially, and were over 5% higher compared to the year-ago period. The company's profitability was also significantly higher than expected at 14.3%, up by 10 basis points compared to the previous quarter.

Tech Mahindra has gone through "every line item" in terms of cash management, and will continue to work on managing its margins, the management said.