US Is Going To See A Muted Growth, Not Recession In 2023-24: Tech Mahindra

Amid the tech industry is going through a tough time with top players, including Google and Amazon, reportedly laying off more than 50,000 employees in the first month of 2023, Tech Mahindra said on Thursday that the company is in the process of hiring more people. A top company executive said that the US is going to see a 'muted growth and not recession' in 2023-24.

Lakshmanan Chidambaram, President (Americas), told Business Standard that it expects to increase the share of the US in total revenue to 60 per cent in the next four years, from around 47.9 per cent now. The company also expects its revenue to grow by 8.8-9 per cent during the current financial year, driven by a rise in total contract value. “Our prediction is that there will not be a recession. The growth will be muted, but there will not be a recession. In the event of a recession, I think the Fed will continue to keep interest rates up, keep inflation down and once inflation is under control, things will start loosening up and things should come back to normal,” Chidambaram said.

Revenue from Americas was 47.9 per cent in fiscal 2021-22, as compared to 47.5 per cent in fiscal 2021. Revenue attributable to Europe was 26.2 per cent during the same period, as compared to 26 per cent in the previous year. Interestingly, the growth was despite the macro-economic challenges faced in the US and the European market. Revenue from Rest of the World (including India) as a percentage of total revenue was 25.8 per cent during the period, down from 26.6 per cent in 2020-21. Its revenue increased to Rs 34,726 crore during the previous financial year.

”As of now, we are talking about 8.8-9 per cent growth during the current financial year. Everyone is projecting muted growth for the next financial year because you are not seeing the war ending. They are also seeing some slowdown in discretionary spending. Our outlook within that framework for next year looks positive,” he said.

He said that while big companies are going for job cuts, Tech Mahindra will be hiring more people in 2023-24. It was facing a higher attrition rate last year. “Overall sentiment in terms of talent acquisition had gone crazy a year and a half ago. That madness has come down. Things have come down on the attrition front. We will be hiring more as our business is growing,” Chidambaram added.

He added that the share of Americas in the total revenue of the company is set to go up in the coming years. “Our outlook is that the Americas business should go to around 60 per cent. This will be a multi-year process, probably in the next four years,” he added.