Tech Mahindra Boosts Shareholder Returns with 70% Dividend Payout

In a move that will delight its shareholders, Tech Mahindra Limited has announced a robust dividend payout for the financial year 2023-24. The company's Board of Directors has recommended a final dividend of ₹28 per share, which combined with the earlier interim dividend of ₹12 per share, takes the total dividend for the year to ₹40 per share.

This translates to a dividend payout ratio of 70% of the company's free cash flow and 170% of its profit after tax (PAT). Together with the earlier interim dividend of ₹12 per share, the total dividend for FY 2023-24 amounts to ₹40 per share (800%) Such a high dividend payout underscores Tech Mahindra's commitment to creating sustainable shareholder value, even in the face of tough demand conditions.

"Upholding our fiduciary duty to create shareholder value, and thanks to our robust cash generation during the year, the Board has recommended a final dividend of ₹28 per share," the company said in its Integrated Annual Report.

"A significant portion of the growth over the next three years will be organic, in addition to our continuing work with the portfolio companies, as our endeavour to build capabilities in-house remains rock solid," the company stated.

With a strong balance sheet, healthy cash flows, and a clear strategic roadmap, Tech Mahindra appears well-positioned to deliver enhanced returns to its shareholders in the years ahead.

Tech Mahindra Annual Report

Tech Mahindra, a leading global IT services provider, has released its Integrated Annual Report for the financial year 2023-24. The report showcases the company's strong financial performance, strategic initiatives, and commitment to sustainable business practices.

Key highlights include robust revenue growth, healthy profitability, and significant progress in environmental, social, and governance (ESG) areas. Get the brief of the report

Key Financial Highlights:

• Consolidated Revenue from Operations: ₹519,955 million
• Net Profit: ₹23,578 million
• Earnings per Share (Diluted): ₹26.58
• Return on Capital Employed: 12.5%
• Free Cash Flow to PAT Ratio: 237%

Business and Operations Highlights:

• Incorporated a wholly-owned subsidiary, Pokhran Wind Energy Private Limited, to develop wind farms in India.
• Launched new digital solutions and services in areas like 5G, cloud, cybersecurity, and Industry 4.0.
• Expanded strategic partnerships with major technology providers like Microsoft, Amazon Web Services, and Google Cloud.
• Strengthened capabilities in emerging technologies like artificial intelligence, machine learning, and Internet of Things.
• Headcount stood at 145,455 employees with women comprising 33.12% of the workforce.

Industry Outlook and Future Strategy:

• The global IT services market is expected to grow at a CAGR of 8-10% over the next 3-5 years, driven by increasing technology adoption across industries.
• Tech Mahindra's strategic focus is on "Scale at Speed" - a combination of organic growth initiatives and portfolio optimization to improve financial performance and enable long-term sustainable growth.
• Key priorities include expanding digital capabilities, enhancing operational efficiencies, strengthening client relationships, and nurturing talent.
• The company aims to distribute 85% or more of its free cash flow generated over five years to shareholders through dividends or buybacks.

Management and Risk Analysis:

• The new leadership team, led by the recently appointed MD & CEO Mohit Joshi, brings extensive industry experience to drive the company's transformation.
• Key risks identified include macroeconomic uncertainties, talent crunch, cybersecurity threats, and regulatory changes, which the company is actively monitoring and mitigating.
• Tech Mahindra has a robust enterprise risk management framework in place to identify, assess, and manage risks across the organization.

Overall, Tech Mahindra's FY24 Integrated Annual Report showcases the company's strategic focus on digital transformation, operational excellence, and sustainable value creation for its stakeholders.

Annual Report 2023-2024 

Tech Mahindra 

Tech Mahindra is a prominent player in the global IT services industry, offering a wide range of digital solutions and consulting services to clients across various sectors. As part of the Mahindra Group, a multinational conglomerate with a strong presence in industries like automotive, agriculture, and renewable energy, Tech Mahindra leverages its parent company's expertise and resources to deliver innovative technology solutions.

With over 145,000 employees spread across 90+ countries, Tech Mahindra serves more than 1,100 clients worldwide. The company's core offerings include digital transformation, cloud computing, cybersecurity, artificial intelligence, and industry-specific solutions for sectors like telecommunications, healthcare, and manufacturing.