Tech Mahindra Q3 Results: Profit Falls 21%, Misses Estimates

Tech Mahindra Ltd. said on Friday that its profit for the three months ended December fell 21.4% on a sequential basis to Rs 988.8 crore, missing the street expectations of Rs 1,061 crore.

The information technology firm recorded a 0.2% decline in revenue to Rs 13,285.6 crore in the quarter ended Dec. 31, 2024, according to an exchange filing on Friday. That compares with the Rs 13,391-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue down 0.2% to Rs 13,285.6 crore versus Rs 13,313.2 crore. (Estimate: Rs 13,391 crore).

• Net profit down 21% to Rs 988.8 crore versus Rs 1,257.5 crore. (Estimate: Rs 1,061 crore).

• EBIT up 5% to Rs 1,350.2 crore versus Rs 1,280.4 crore. (Estimate: Rs 1,326 crore).

• EBIT margin at 10.2% versus 9.6%. (Estimate: 9.9%).

Segment-wise, the revenue from manufacturing dipped 7.2% year-on-year, healthcare and life sciences rose by 2%, communications dipped 5.6%, high-tech and media grew 3.5%, banking, financial services and insurance rose 8.3% and retail, transport and logistics slipped 1.6%.

“We see an improved rate of deal wins in our key verticals and prioritised markets. This, coupled with consistent expansion in operating margins, despite cross-currency headwinds during the quarter, reaffirms that we are on track to achieve our long-term goals,” said Mohit Joshi, chief executive officer of Tech Mahindra.

In terms of geographies, the revenue from America dipped 1.8% sequentially, while from Europe it declined by 3%. However, the revenue from the rest of the world grew 1.3%.

The value of company's new deal wins during the quarter stood at $745 million, higher than $603 million recorded in the July-September period. The number of active clients dipped to 1,175 from 1,178 last quarter.

Tech Mahindra's employee headcount stood at 1,50,488, a decrease of 3,785 employees since the last quarter. The rate of attrition stood at 11.2%, and utilisation stood at 85.6%.

The quarterly results were released by Tech Mahindra after the market hours. The company's scrip settled 1.8% lower at Rs 1,658.85 apiece on the BSE, compared to a 0.55% decline in the benchmark Sensex.