Tech Mahindra - Financial Report Analysis

8/8/2019 Tech Mahindra - Financial Report Analysis

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Naveen KanthedEPGP 2010-11

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Designation NameChairman Anand G Mahindra

Vice Chairman, MD & CEO Vineet Nayyar

Director Akash PaulDirector Anupam Puri

Director Bharat N Doshi

Director Paul Zuckerman

Director Raj Reddy

Director Ulhas N Yargop

Director M Damodaran

Director Ravindra Kulkarni

Director B H Wani

Director Nigel Stagg

Director Richard Cameron

Company Secretary Anil Khatri

Industry – Computer Software – LargeIncorporation Year - 1984Management Structure -

Auditors - Deloitte Haskins & Sells2



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• Total debt increased from INR 0 in 2009 to INR 2134.90 Crs in 2010. This isbasically because of the borrowings made to acquire stake in Satyam.• Ratio of loans and advances to total assets also increased in 2010.

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• Just a 6% rise in income in 2010 as compared with the income of 2009. Thefact behind this is economic recession which hit almost all the outsourcingcompanies. Expense also remains more or less same.

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• Decline in Profits of the company were reported in 2010. This is because of the huge interest cost on the money borrowed for Satyam acquisition.

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• Cash from Operating and Investing activities shows good trend.However, there is a huge negative cash flow for the financing activities.This is accounted for the investment that Tech Mahindra made in Satyam

through it’s subsidiary Venturbay Consultants Private Limited10



• Only four years data has been considered for calculating valuationratios because the company was listed in 2007.• Evaluation saw a steep rise just after the listing. Thereafter the economic

recession in 2009 took away the momentum of the company’s growth.11



• Debt-Equity Ratio shows a steep rise in 2010 because of the hugeborrowings that company took from the market for Satyam’s acquisition.

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• Fixed Assets shows a steep rise in 2007 and 2008. This was the period just after the company’s listing on Stock Exchange. Company used theamount raised from the issue to create assets in the form of new facilities.

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In the Director’s Report of 2010, Mr. Anand G. Mahindra (Chairman) hashighlighted following Salient points –

• Recommendation of dividend of Rs. 3.50 per share.• Tech Mahindra rated as the fifth largest Indian IT services company byNASSCOM.• Total income increased to Rs. 45,747 Million from Rs. 43,153 Million in theprevious year (growth of 6%).• 58.6% of the revenue of the company came from Europe, 29.4% came from USA and 12.0% came from Rest of the World. 96.90% of the revenues were derivedfrom exports.•

Company acquired a 42.67% shareholding in Satyam Computer ServicesLimited with an investment of Rs. 29,695 Million, which was partly funded byborrowings. Consequently, Interest cost substantially increased to Rs. 1,600Million as compared to Rs. 25 Million in 2009.• The huge interest cost has also lead to low profit of Rs. 7,315 Million as againstRs. 9,866 Million in the previous year.•

Company made a net addition of 8,552 to its workforce. 15



Thank You !

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Tech Mahindra - Financial Report Analysis

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