The company sees improvement in this wholly-owned subsidiary in the coming quarters
Debasis Mohapatra
Bengaluru, 18 September 2024
The drag coming from Tech Mahindra’s subsidiary Comviva on the IT company’s overall earning is coming down as the seasonality factor wanes.
In the post Q1FY25 earnings analyst call, the company management has indicated that it has a pole position in the telecom segment, which is likely to recover in the future.
“Yes, I think, the Comviva drag from Q4 to Q1 is roughly about 0.5%,” Mohit Joshi, CEO & MD of Tech Mahindra has said answering to a specific query on whether the Comviva seasonality coming down over time.
Comviva, which is a wholly-owned subsidiary of Tech Mahindra, provides customer experience and data monetization solutions to telecom companies.
In June, Tech Mahindra has appointed Rajesh Chandiramani as Comviva’s CEO and Director in its bid to accelerate growth.
On the performance of telecom sector, Tech Mahindra’s management has said that the telecom vertical would see year-on-year growth in FY25 as the degrowth is declining.
“The telecom sector continues to be challenged. But if you look at it from an FY24 perspective for the full year, our telecom business declined by about 12.4%, for Q4 it declined by about 16.5%, but in the most recent quarter, the decline has come down to single digit now. So, I expect to see some level of year on-year improvement in the telecom business over time,” Joshi has said.
Telecom is the largest vertical of Tech Mahindra contributing more than 35% to its total revenue. According to the company, its position in the sector remains strong despite a tight demand environment.
“We are present in seven of the top-10 operators. And as I look at the priorities that operators have, these are broadly in three areas. The first is on the cost side, whether it’s a vendor consolidation or it is autonomous operations and autonomous networks, we are active in that space. The second is revenue generation both on the B2B side and on the B2C side, and on the wholesale network side, again, working on a number of initiatives with clients there. And finally, working with our clients to help them become AI-native telcos,” Joshi has said.
He said the company will take advantage of its leadership position whenever demand revives.
