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Tech Mahindra expects $7 billion revenue run rate this fiscal

IT company Tech Mahindra expects to soon hit USD 7 billion revenue run rate for the current fiscal year, out of which the telecom vertical is estimated to contribute USD 3 billion, a top official of the company said on Monday. Tech Mahindra Managing Director and Chief Executive Officer CP Gurnani told PTI that the company has hit a run rate of USD 1 billion (about Rs 8,300 crore), from 5G solutions that it provides to telecom companies.

“We are at an annual revenue run rate of USD 6.6 billion. We expect to reach USD 7 billion run rate for this fiscal. Telecom vertical is expected to contribute USD 3 billion to this. We have already touched a revenue run rate of USD 1 billion from 5G services,” Gurnani said at Mobile World Congress (MWC) 2023.

Tech Mahindra posted a 5 per cent decline in consolidated profit after tax at Rs 1,297 crore for the December quarter. Revenue from operations, however, increased 20 per cent to Rs 13,734.6 crore from Rs 11,451 crore a year ago.

Tech Mahindra President, Communications, Media and Entertainment Business, and CEO, Network Services, Manish Vyas said 50 per cent of the company’s business comes from the American region, 30 per cent from Europe and 20 per cent from the rest of the world.

“We believe this trend will continue because we have invested in these geographies. All the sectors within telcos, be it the growth of fibre, fixed wireless, new product build and all the transformation on the digital side, have continued to provide us growth,” he said.

Talking about the impact of the global macroeconomic situation on the company, Vyas said uncertainty still remains across the globe and there will be intense pressure on the cost of services.

“The overall macroeconomic situation still remains uncertain. People will need to conserve as we go forward. It is an important opportunity for us to continue to drive cost optimization through simplification. The broad macroeconomic situation also will evolve as we come out of this uncertain time. People will need to continue to innovate more. Particularly with the whole focus on generative AI as well as the way metaverse will be used by enterprises,” he said.

Vyas said that globally the company has acquired 42 new logos this year to whom it is providing network transformation including solutions for private 5G networks.

“It is essentially a network on the cloud, software-defined network and private network. The growth driver has been a requirement of enterprises to simplify their operations and modernise tracking of their business data,” he said.

Gurnani said several companies are engaging with Tech Mahindra to simplify, modernise and monetise their networks, and the rollout of the 5G network across the globe will continue to drive the business of the company.

“We are very keen to look at how the rollout of 5G and deployments will happen. It is a big year from a deployment standpoint. It is a big year for the modernisation of the digital stack. I think telcos will look to find adjacencies with fintech, learning, manufacturing, IoT etc for growth. We are very excited about 2023. There are a lot of case studies that will emerge in all these areas,” Vyas said. PTI

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