Tech Mahindra Q4 Results: Profit Beats Estimates, Revenue Flat

Tech Mahindra Ltd.'s consolidated net profit surged 19% in the final quarter of fiscal 2025, beating the estimates shared by analysts.

The IT services firm logged a consolidated bottom line of Rs 1,167 crore, which surpassed the consensus estimate of Rs 1,084 crore of the analysts tracked by Bloomberg.

The company posted a revenue of Rs 13,384 crore in the quarter ended March 31, according to an exchange filing on Thursday. Analysts tracked by Bloomberg had a consensus estimate of Rs 13,460 crore.

• Revenue up 0.7% at Rs 13,384 crore versus Rs 13,286 crore. (Bloomberg estimate: Rs 13,460 crore).

• EBIT up 2% at Rs 1,378 crore (Estimate: Rs 1,394 crore).

• Margin expands to 10.3% versus 10.2% (Estimate: 10.3%).

• Net profit up 18.7% to Rs 1,167 crore versus Rs 983 crore. (Estimate: Rs 1,084 crore).

"Revenue in the fourth quarter was impacted by delay in customer renewal decisions for a US high-tech client, along with seasonal trends in retail and BPS segment, which we expect to correct over time," Chief Executive Officer Mohit Joshi said.

Discretionary spending in the US is taking a hit again, with auto and high-tech verticals seeing initial hits from tariffs. Communication remains a mainstay vertical and hi-tech presents an opportunity to expand the revenue pool, according to Joshi.

Segment-wise, revenue from manufacturing dipped 5.5% year-on-year, healthcare and life sciences rose 2.3%, communications dipped 2.2%, high-tech and media dipped 4.1%. Banking, financial services and insurance rose 6% and retail, transport and logistics surged 10%.

Decline in the manufacturing vertical's growth in the first half was offset by continuous weakness in the auto segment during the second half of the fiscal. The communications vertical declined as well, with industry headwinds and downturn in the sector. Hi-tech momentum tapered off with the environment turning cautious particularly in the fourth quarter, according to the CEO.

In terms of geographies, the revenue from America dipped 4.7%, while from Europe rose 5.1%. However, the revenue from the rest of the world grew 4.8%.

The value of the company's new deal wins during the quarter stood at $798 million, higher than $745 million recorded in the third quarter. The number of active clients dipped to 1,162 from 1,175 last quarter.

Impact of wage hikes on margin was offset by cost efficiencies. The profit jump was an outcome of higher EBIT margin despite wage hikes, according to Chief Financial Officer Rohit Anand. "Tech Mahindra is focusing on scaling deals bigger than $20 million, which are scaling well."

Tech Mahindra's employee headcount stood at 1,48,731, a decrease of 1,757 employees since the last quarter. The rate of attrition stood at 12%, higher than 11% last quarter, and utilisation stood flat at 86%.

Shares of Tech Mahindra closed 0.47% higher at Rs 1,446.10 apiece on the BSE, compared to a 0.39% decline in the benchmark Sensex. The quarterly results were declared after market hours.