Tech Mahindra Reports Q1FY25 Results, Net Profit Jumps 28.8%

Tech Mahindra announced its Q1FY25 results yesterday, with net profit reaching Rs.851.5 crore, reflecting a significant y-o-y boost of 23% and a sequential rise of 28.8%, this surge was anticipated by analysts due to a low base in Q4FY24. Despite the positive results, Tech Mahindra’s shares dropped by over 4% in early trading today, coming down to Rs.1465.50.

Revenue & Margin Performance

The company’s consolidated revenue for the Q1FY25 climbed to Rs.13,005.5 crore, marking a 10% increase from the preceding quarter. Revenue in USD terms rose to $1,559 million from $1,548 million QoQ, this growth was fueled by portfolio shifts, volume increases, and good cost management. 

EBIT & EBITDA Margins

Tech Mahindra’s EBIT margin improved to 8.5%, an increase of 110 basis points from the previous quarter’s 7.4%, surpassing analysts’ estimate of 8%. The company’s EBITDA stood at Rs.1,564 crore, reflecting a quarterly increase of 11.1% and a yearly growth of 16.9%. Lastly, the EBITDA margin expanded to 12%, up 110 bps QoQ and 190 bps YoY.

Deal Value & Goals

The total contract value (TCV) for Q1FY25 reached $534 million, up from $500 million in the previous quarter. CEO Mohit Joshi highlighted the positive momentum across industry verticals, contributing to revenue growth and margin expansion in a typically weak quarter. Moreover, Tech Mahindra’s total headcount increased by 2,165 sequentially but decreased by 677 YoY, bringing the total to 147,620. Attrition remained stable at 10% sequentially and Cash and Cash Equivalent remained at Rs.8,055 cr as of June 30, 2024

Conclusion: Tech Mahindra’s Q1FY25 results showcase a strong start to FY25 with growth in net profit and improved margins. Despite challenges in the telecom sector and a mixed market reaction, the company’s focus on portfolio shifts, volume growth, and cost management has yielded positive outcomes. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.