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Informist, Wednesday, Jul. 16, 2025

 

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--Tech Mahindra cash, cash equivalent INR 80.72 bln as on Jun 30
--Tech Mahindra Apr-Jun IT headcount 79,987, down 622 on quarter
--Tech Mahindra Apr-Jun consol revenue down 1.4% in constant currency on qtr
--Tech Mahindra Apr-Jun free cash flow $86 mln vs $150 mln qtr ago
--Tech Mahindra Apr-Jun over $50 mln clients at 26, up 2 on year
--Tech Mahindra: Deal wins grew 44% on last 12 months basis
--Tech Mahindra Apr-Jun free cash flow $86 mln vs 150 mln qtr ago
--Tech Mahindra Apr-Jun consol EBITDA INR 19.35 bln vs INR 18.67 bln qtr ago
--Tech Mahindra IT services last 12-month attrition 12.6% vs 11.8% qtr ago
--Tech Mahindra Apr-Jun total headcount 148,517, up 897 on year
--Tech Mahindra Apr-Jun IT services utilisation 85.0% vs 86.3% qtr ago
--Tech Mahindra Apr-Jun revenue from Europe up 3.6% on qtr
--Tech Mahindra Apr-Jun revenue from Americas up 2.6% on qtr
--Tech Mahindra Apr-Jun health, life sciences vertical sales up 0.1% on qtr
--Tech Mahindra Apr-Jun consol EBIT margin 11.1% vs 10.5% quarter ago
--Tech Mahindra Apr-Jun retail, transport, logistics sales down 1% on qtr
--Tech Mahindra Apr-Jun BFSI vertical sales dn 0.6% on qtr
--Tech Mahindra Apr-Jun tech, media vertical sales up 1.3% on qtr
--Tech Mahindra Apr-Jun consol sales $1.56 bln vs $1.55 bln qtr ago
--Tech Mahindra Apr-Jun mfg vertical sales up 4% on qtr
--Tech Mahindra Apr-Jun communications vertical sales up 2.8% on qtr
--Tech Mahindra Apr-Jun business process services revenue INR 20.88 bln
--Tech Mahindra Q1 IT svcs revenue INR 112.64 bln vs INR 113.28 bln qtr ago
--Tech Mahindra Apr-Jun consol EBIT margin 11.1%, up 260 bps on year
--Tech Mahindra Apr-Jun consol sales INR 133.51 bln vs INR 133.84 bln qtr ago
--Tech Mahindra Apr-Jun consol net profit INR 11.41 bln vs INR 11.67 bln qtr ago
--Tech Mahindra Apr-Jun new deal wins worth $809 mln vs $798 mln qtr ago
--Analysts saw Tech Mahindra Apr-Jun consol net profit at INR 12.07 bln
--Tech Mahindra Apr-Jun consol net profit INR 11.41 bln

By Sunil Raghu

 

AHMEDABAD – Tech Mahindra Ltd.'s key earnings metrics in the June quarter seem to be in line with the comments by the management made during the post-March quarter earnings press conference on Apr. 24, wherein they said that client demand visibility "is a little bit muddy just now". On other hand, the street's expectation was of a low single digit rise in the company's earnings numbers. Instead, the Pune-based company's net profit and revenue fell. Weakness in some segments such as manufacturing, banking and financial services, and retail, logistics and transport led to pressure on the growth in the company's top line for the quarter. 

 

India's fifth-largest IT company posted a sequential fall of 2.24% in consolidated net profit for June quarter to INR 11.41 billion, lower than the Street's estimate of INR 12.07 billion. Its consolidated revenue fell 0.25% on quarter to INR 133.51 billion, lower than the analysts' expectation of INR 133.90 billion.

 

From the year-ago period, the bottom line rose 33.95% and the top line increased nearly 2.66%. In dollar terms, the company's revenue for the June quarter rose 1% sequentially and 0.4% on year to $1.56 billion, from $1.55 billion a quarter ago. This was in in line with the street expectations. The IT player's top line in constant currency terms according to an average of estimates by 11 brokerages was likely to be $1.56 billion. It fell 1.4% sequentially. From the year-ago period, the company's sales fell 1% in constant currency terms.

Among other key earnings metrics, the company's earnings before interest and tax, came in at INR 14.77 billion, up 34% on year. The EBIT margin was up 260 basis points on year at 11.1%. In dollar terms, operating profit rose 50 basis points on quarter and 30.2% on year to $172.00 million.

 

"We have delivered seven consecutive quarters of margin expansion – a clear reflection of the discipline and focus across our organization. Even in an uncertain environment, our Project Fortius program continues to generate meaningful results and drive operational improvements," Chief Financial Officer Rohit Anand said, according to a press release from the company.

 

The company released its quarterly results Wednesday after market hours. Its shares closed 1.8% higher at INR 1,607.90 on the National Stock Exchange. The management's post-earnings call with analysts was scheduled at 1745 IST.

 

GEOGRAPHIES, SEGMENTS

Tech Mahindra's major market, the Americas, and some of its key verticals saw weaker growth in revenue in the June quarter. Revenue from the Americas, which accounted for more than 49.2% of the company's sales in the reporting quarter, fell 5.9% on year but was up 2.6% on quarter. It is likely that the IT company also felt some of the heat from US tariffs through its clients in the world's largest economy. While some IT companies have said they do not expect any major direct impact from the tariffs, they have at the same time issued a caution about possible indirect ripple effects. The contribution from the Americas to Tech Mahindra's revenue rose to 49.2% in the June quarter from 48.4% a quarter ago.

 

On other hand, revenue from Europe rose 11.7% on year and 3.6% on quarter to account for 26% of Tech Mahindra's revenue in June quarter, against a share of 25.4% in Jan-Mar period. The company's revenue from the rest of the world fell 4.5% on quarter to 24.8%. This too was, however, up 2.9% year-on-year.

 

Of the company's six major verticals, only two saw a sequential fall in revenue. Though the four verticals saw sequential growth, it failed to boost Tech Mahindra's muted overall top line in the June quarter. The revenue from its third-biggest vertical, banking, financial services and insurance, fell 0.6% on quarter and that of retail, logistics and transport fell 1% quarter-on-quarter. The biggest vertical communications saw the revenue rise of 2.8% on quarter, manufacturing, up 4% on quarter. Revenue from the hi-tech and media vertical rose 1.3% sequentially, and healthcare and life sciences increase marginally by 0.1% on quarter.

 

DEALS, EMPLOYEES

The IT firm's total contract value during the reporting quarter increased to $809 million from $798 million in Jan-Mar and from $534 million a year ago. The number of its $50 million-plus clients rose by one over Jan-Mar and by two on-year to 26, that of $20 million-plus clients too rose by one sequentially to 60 but fell by one compared to June quarter a year ago. The number of the $10 million-plus category clients too increased by two quarter-on-quarter to 108 but fell from 113 in June quarter a year ago. The deal wins grew 44% on last 12 months basis, the company reported. During the quarter, the company's IT services revenue was at INR 112.64 billion, down from INR 113.28 billion in Jan-Mar, and that of business process services came in at INR 20.88 billion.

 

The company's headcount fell by 214 employees sequentially but rose by 897 people on year to 148,517 in June quarter. Of this, 79,987 were IT professionals, 60,278 were business process service professionals and 8,252 sales and support personnel. The number of IT professionals fell by 622 on quarter. Its attrition rate increased to 12.6% during the reporting quarter from 11.8% in Jan-Mar and 10.1% in June quarter a year ago. The employee utilisation rate fell to 85% in the reporting quarter, down from 86.3% a quarter ago and 86.1% a year ago.

 

As of Jun 30, Tech Mahindra's cash, cash equivalent stood at INR 80.72 billion, with free cash flow at $86 million for the June quarter, compared to $150 million in Jan-Mar. Its consolidated EBITDA for June quarter too stood at INR 19.35 billion, compared to INR 18.67 billion in March quarter.  End

 

Edited by Akul Nishant Akhoury

 

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