Tech Mahindra Q1 revenue beats estimates
PUNE, INDIA — Tech Mahindra, India’s fifth-largest IT services firm, reported a 1.2% decline in consolidated revenue for the first quarter of FY25, amounting to ₹13,005 crores ($1.55 billion).
Despite the year-on-year decrease, the company surpassed analysts’ expectations, which stood at ₹12,945 crores ($1.54 billion), according to LSEG data.
The company’s revenue growth was driven by strong performance in the manufacturing and healthcare sectors, signaling a resurgence in client spending, particularly in its clients from the United States.
CEO and Managing Director Mohit Joshi said, “It is encouraging to see positive momentum in most industry verticals which has led to revenue growth and margin expansion in an otherwise seasonally weak quarter.”
Profit and margins
Tech Mahindra’s profit after tax (PAT) increased by 28.8% quarter-on-quarter, reaching ₹851 crores ($101 million). This improvement was attributed to a 170 basis point increase in operating margins, which rose to 8.5% in the June quarter.
The company’s EBITDA margin also expanded by 110 basis points quarter-on-quarter, reaching 12%.
At the same time, the firm’s net new deal bookings increased to $534 million, up from $500 million in the previous quarter and $359 million in the same period last year, indicating a positive trend in client engagements and future revenue streams.
Sector recovery and future outlook
India’s IT sector, valued at $254 billion, faced sluggish demand in recent years due to economic uncertainties and higher interest rates.
However, Tech Mahindra’s Q1 results, along with upbeat performances from larger rivals like Tata Consultancy Services, Infosys, and HCL Technologies, suggest a recovery in North America. These companies have noted that “the worst might be over for the sector”.
Tech Mahindra’s strategic focus on execution and long-term sustainable performance is evident from its recent partnerships and client wins. The company secured significant deals across various sectors, including telecommunications, healthcare, and automotive, which are expected to drive future growth.
Strategic initiatives and client wins
Tech Mahindra’s recent collaborations include a partnership with Dell Technologies and Intel to implement its large language model (LLM) Project Indus’s ‘GenAI in a box’ framework globally. Additionally, the company has expanded its strategic partnership with Cisco to deliver next-generation firewall modernization solutions for global customers.
Other notable client wins include a deal with a leading U.S.-based telecom company to modernize and operate front and back-office applications and a project with a Japanese automotive manufacturer to roll out a global SAP implementation as part of its digital transformation program.
Tech Mahindra’s Q1 performance indicates a positive start to FY25, with improved margins, increased profitability, and strong client engagements. The company’s strategic initiatives and sector recovery in North America are expected to contribute to its growth trajectory in the coming quarters.
Tech Mahindra Chief Financial Officer Rohit Anand stated that the company’s Q1 results “are a positive start both for current turnaround year as well as for our medium-term strategy.”
Joshi added they will “continue to focus on execution and are on track to achieve our stated goals for FY27.”
