Tech Mahindra sees sharp slowdown in all verticals except media and entertainment

• As expected, Tech Mahindra’s revenue was down 6.7% in the first quarter.
• The only vertical that wasn’t in the red was the media and entertainment.
• Communications, manufacturing, banking and financial services, which together make for over 70% of the company’s revenue witnessed a steep fall in revenue.

One of India’s top five IT services firms, Tech Mahindra, has seen a sharp slowdown in April-June 2020. However, the 6.7% fall in revenue, compared to three months ago, was much on expected lines. Communications, manufacturing, banking and financial services, which together make for over 70% of the company’s revenue witnessed a steep fall in revenue.

The only silver lining was the media and entertainment vertical but, even after the surge in the last three months, it makes for less than a tenth of all revenue.

The business process outsourcing segment, which made about a tenth of the revenue and profit, has also shrunk significantly. The revenue halved during the lockdown and the number of people employed in this segment is down by 1,200.

The overall attrition in the company has improved to 17%, according to the company, though the number of employees has also reduced by 1,820.

It brought in a $290 million worth of new deal wins in the first quarter. “We’ve seen spend coming back in many of the sectors mostly because of faster technology adoption,” said Tech Mahindra CEO CP Gurnani. “When I look at the deal pipeline I feel that it’s the strongest its been in three years,” he added saying that deal closes can take a long time.

“I see BPO normalising in Q2 and uptake in revenue,” said Tech Mahindra CFO Manoj Bhat.