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Informist, Wednesday, Jul. 16, 2025

By Anand JC

NEW DELHI – Tech Mahindra Ltd. reported a 1.4% sequential fall in revenue for the June quarter in constant currency terms despite higher deal wins because of discretionary cuts by clients and some run-offs over the past six months, its management told reporters in a post-earnings press conference. The company expects deal wins to start contributing towards revenue growth in the second half of the financial year 2025-26 (Apr-Mar).

The company won deals worth $809 million in the June quarter, higher than $798 million in the March quarter and $534 million a year ago. The management said its US business was hit by challenges related to semiconductors, which led to a slowdown in its automotive services.

A reduction in spending in the automotive sector hit Tech Mahindra's year-on-year revenue performance, it said. The company's manufacturing vertical, which accounts for around 18% of its overall sectoral mix, declined 4% on year in the June quarter due to softness in the automotive segment.

The company said that to improve its growth potential in this vertical, it continues to engage closely with the manufacturing experience centre that was inaugurated in Chennai in January and has hosted over 60 client visits so far.

The company said it had trained over 77,000 employees in artificial intelligence and generative AI. "We now have a portfolio of 200-plus enterprise-grade AI agents across industry segments, several of them already new at scale with our clients," it said.

For the June quarter, the company reported an earnings before interest and tax margin of 11.1%, up 50 basis points sequentially. But the growth was restricted by seasonality in some verticals, higher visa costs, and lower utilisation, Tech Mahindra said.

It said the market is volatile currently, with continued slowdown in the automotive and hi-tech portfolios. It expects the latter to recover in the second half of FY26. "It's too early to say whether the tide has turned towards, you know, significant growth or, god forbid, towards a recession," the management said.

Given the hazy macroeconomic situation, Tech Mahindra said demand sentiment in certain sectors is still not conducive to significant discretionary investments. "It is a mixed picture across geographies and across industries, not uniform," it said.

Despite the uncertainty, the company said it has a strong pipeline of deals at least for the next two quarters. Deal wins in the June quarter were broad-based across multiple verticals like telecommunication, banking, financial services, and insurance, the management said.

The company reported its March quarter earnings after market hours. It reported a consolidated net profit of INR 11.41 billion on a revenue of INR 133.51 billion. Wednesday, its shares closed 1.8% higher on the National Stock Exchange at INR 1,607.9.  End

Edited by Rajeev Pai

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