Open Access Open Access  Restricted Access Subscription Access

A STUDY ON STRATEGIES FOR IMPROVEMENT IN ROE FOR TECH MAHINDRA: INSIGHTS FROM DUPONT ANALYSIS

SUHAS K B

Abstract


This paper analyzes financial performance of Tech Mahindra using the DuPont Analysis Framework to determine its Return on Equity (ROE) over the period from 2015 to 2024 by taking a close look at its financial performance in terms of Profitability, operational efficiency, and financial gearing. From the analysis, it is evident that the firm is steady in generating profitability and asset efficiency, but it heavily uses the FL to achieve ROE. It is a successful method for the short term but holds dangers for the organization as it develops higher debts.

The discovery shows that the PAT margin has strong positive effects on ROE with sources having stable costs and revenues through proper pricing. At the same time, there are some essential issues that directly relate to the company’s operational efficiency and asset utilization. Moreover, market conditions, industry trends, and other macro environments elements are chosen in the study as other factors contributing to performance fluctuations.

The report also includes practical recommendations on ROE improvement for the Tech Mahindra company. These include majoring on digital services with high margin, increasing turnover through adoption of advanced technologies and automation, and right balance in the utilization of funds. Since these goals are tied up with ESG and long-term shareholders’ value creation, Tech Mahindra can reinforce its market standing and gain sustainable growth.

Besides giving an understanding of Tech Mahindra’s financial techniques, this work helps investors consider how specific business conditions impact the company’s management efficiency and its performance in the future.


Full Text:

PDF

References


• StockEdge. (n.d.). Tech Mahindra financial ratios. Retrieved from https://web.stockedge.com/share/tech-mahindra/7531?section=ratios

• Moneycontrol. (n.d.). Tech Mahindra consolidated yearly financial results. Retrieved from https://www.moneycontrol.com/financials/techmahindra/results/consolidated- yearly/tm4

• Soliman, M. T. (2008). The use of DuPont analysis by market participants. The Accounting Review, 83(3), 823–853. https://doi.org/10.2308/accr.2008.83.3.823

• Pandey, I. M. (2015). Impact of financial leverage on shareholders return and financial performance of the listed companies in Sri Lanka. Oman Chapter of Arabian Journal of Business and Management Review, 34(2), 53–65.

• Kapoor, S., & Mehta, A. (2019). Impact of profit margin on business valuation: Evidence from Indian manufacturing sector. International Journal of Innovative Technology and Exploring Engineering, 8(12), 2194–2200.

• Johnson, R., & Soenen, L. (2003). Indicators of asset utilization and corporate profitability. Journal of Applied Business Research, 19(1), 35–46. https://doi.org/10.19030/jabr.v19i1.2204

• Sharma, R., & Jain, P. K. (2021). DuPont analysis of Indian IT firms: A case study of Tech Mahindra. Journal of Management Research and Analysis, 8(2), 75–82.


Refbacks

  • There are currently no refbacks.