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Informist, Tuesday, Oct. 14, 2025

 

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--Tech Mahindra Jul-Sept consol net profit INR 11.95 bln 
--Analysts saw Tech Mahindra Jul-Sept consol net profit at INR 12.94 bln 
--Tech Mahindra Jul-Sept consol revenue INR 139.95 bln 
--Analysts saw Tech Mahindra Jul-Sept consol revenue at INR 138.08 bln 
--Tech Mahindra Jul-Sept consol PAT INR 11.95 bln vs INR 11.41 bln qtr ago 
--Tech Mahindra Q2 consol revenue INR 139.95 bln vs INR 133.51 bln qtr ago 
--Tech Mahindra to pay INR 15 per share interim dividend 
--Tech Mahindra interim dividend record date is Oct 21 
--Tech Mahindra Jul-Sept consol revenue up 1.6% QoQ in constant currency 
--Tech Mahindra Jul-Sept consol revenue down 0.3% on yr in constant currency 
--Tech Mahindra Apr-Sept consol PAT INR 23.35 bln vs INR 21.02 bln year ago 
--Tech Mahindra Apr-Sept consol sales INR 273.46 bln vs INR 263.19 bln year ago 
--Tech Mahindra Jul-Sept consol EBIT margin 12.1%, up 108 bps on qtr 
--Tech Mahindra Jul-Sept new deal wins worth $816 mln vs $809 mln qtr ago 
--Tech Mahindra Q2 IT svcs revenue INR 117.67 bln vs INR 112.64 bln qtr ago 
--Tech Mahindra IT services last 12-month attrition 12.8% vs 12.6% qtr ago 
--Tech Mahindra: Saw eighth straight quarter of margin expansion in Q2 
--Tech Mahindra total headcount 152,714 on Sept 30 vs 148,517 on Jun 30 
--Tech Mahindra Jul-Sept communications vertical sales dn 2% on qtr 
--Tech Mahindra Jul-Sept mfg vertical sales up 5.3% on qtr 
--Tech Mahindra Jul-Sept BFSI vertical sales up 3.8% on qtr 
--Tech Mahindra Jul-Sept tech, media, enterprises vertical sales dn 0.4% QoQ 
--Tech Mahindra Jul-Sept retail, transport, logistics sales up 9% on qtr 
--Tech Mahindra Jul-Sept health, life sciences vertical sales up 2.3% on qtr 
--Tech Mahindra Jul-Sept revenue from Americas up 2.6% on qtr 
--Tech Mahindra Jul-Sept revenue from Europe dn 1.2% on qtr 
--Tech Mahindra Jul-Sept consol EBIT INR 16.99 bln, up 15% on qtr 
--Tech Mahindra Jul-Sept IT services utilisation 84.4% vs 85.0% qtr ago 
--Tech Mahindra Jul-Sept free cash flow $237 mln vs $86 mln qtr ago 

 

By Anjana Therese Antony

 

MUMBAI – The sequential growth in Tech Mahindra Ltd.'s top line in Jul-Sept was the highest in 13 quarters and also beat the Street's expectation by a slight margin. This was supported by growth across most of its business verticals and its core American markets. While the information technology player's bottom line rose on quarter, it failed to meet analysts' expectation. Also, the company's operating margin grew for the eighth consecutive quarter. 

 

The Pune-based company's consolidated net profit increased almost 5% sequentially to INR 11.95 billion, but was lower than the expectation of INR 12.94 billion. Its consolidated revenue also rose nearly 5% sequentially to INR 139.95 billion, beating the Street's expectation of INR 138.08 billion. In constant currency terms, the revenue of India's sixth-largest IT firm in terms of market capitalisation rose 1.6% sequentially, but fell 0.3% on year. 

 

Revenue from IT services business, its core operation that accounted for 84% of the total overall top line in the reporting quarter, saw a 4% sequential growth to INR 117.67 billion. Its earnings from business process services, which accounted for the remaining 16% of the top line, increased almost 7% from the previous quarter to INR 22.28 billion. The company's growth also comes amid continued uncertainty about US policies, particularly around tariffs, trade and visas, and no major change in clients' discretionary spends on IT. 

 

The company said its total contract value saw robust growth due to strong deal conversions. The value of new deals won during the reporting quarter was $816 million, better than the deals worth $809 million won in the previous quarter and also higher than the guided range of $600 million-$800 million. 

 

For the six months ended Sept. 30, the IT player's consolidated bottom line grew 11% on year to INR 23.35 billion and top line rose almost 4% to 273.46 billion. It also announced an interim dividend of INR 15 per share, for which the record date is Oct. 21. 

 

The IT company's earnings before interest and tax margin improved by 108 basis points on quarter and 254 bps on year to 12.1%. This is way better than the 60-bps on-quarter growth broking firms had expected. Brokerages had attributed the margin growth to lower sub-contractor costs and selling, general, and administrative expenses. Its EBIT grew 15% sequentially and almost 33% on year to INR 16.99 billion. 

 

Its overall expenses during the latest quarter increased almost 4% from the previous quarter to INR 123.73 billion. The company's free cash flow was sharply up at $237 million compared to $86 million a quarter ago. 

 

SEGMENTS, GEOGRAPHIES

Tech Mahindra saw growth in most of its business verticals--including manufacturing, technology, media, and entertainment, and banking, financial services, and insurance--and core market in Americas, which primarily drove the financials in the reporting quarter. However, revenue from its core communications business, which accounts for almost 33% of its overall sales, fell sequentially as well as on year. Earnings from its second-biggest region, Europe, also saw some weakness as compared to the previous quarter. 

 

The biggest vertical, communications, saw its revenue fall 2% on quarter and on year. The fourth-biggest business--technology, media and entertainment--also reported a weak performance, posting a fall in revenue of 0.4% from the previous quarter and almost 9?cline from the year-ago period. 

 

However, other businesses posted sequential growth in top line. Revenue from the second-biggest manufacturing vertical rose over 5% on quarter as well as on year. The growth in the manufacturing sector also comes amid pressure in the automobile sector across global markets. BFSI grew almost 4% sequentially and 6% on year, another segment--retail, logistics, and transport--rose 9% on quarter and 7% on year. The smallest business, healthcare and lifesciences, which constitutes 7% of the top line, saw modest sequential growth of 2.3%, but an on-year fall of 1.2%. 

 

Geography-wise, Tech Mahindra's core business in Americas saw a revenue growth of 2.6% on quarter, but fell 2.7% on year. Its revenue from business in European countries fell 1.2% sequentially, but grew almost 6% from the year-ago period. Europe accounted for more one-fourth of Tech Mahindra's revenue in the latest quarter. Revenue from rest of the world, which also accounts for a quarter of overall sales, rose almost 2% on quarter, but fell 0.5% on year. 

 

HEADCOUNT, CLIENTS

The company's total headcount in IT services fell by 1,459 from the previous quarter to 78,528 as of September. From the year-ago period, this is a decline of 2,090 employees. Of the total staff under its IT services division, almost 22% are employed onsite, while the remaining 78% are deployed offshore. In its business process services division, the company has a total headcount of 66,095, up from 60,278 employees a quarter ago. Tech Mahindra's employee utilisation in the September quarter was 84.4%, slightly lower than the 85% a quarter ago and 86.3% in the year-ago period. 

 

The company added three clients under the $20-million category and one under the $5-million group. However, the number of clients declined by two under the $10-million category and by nine in the $1-million group. Revenue from its top five clients accounted for almost 16% of the company's revenue and that from the top 10 clients constitutes just a little over 24%. 

 

Tech Mahindra is engaged in the business of consulting services and system integration, operating in more than 90 countries. The company released its quarterly results after market hours Tuesday. Ahead of the earnings, its shares closed around 1% higher at INR 1,468 on the National Stock Exchange. Its market capitalisation grew by nearly 17 billion on Tuesday to INR 1.44 trillion.  End

 

US$1 = INR 88.80

 

Edited by Deepshikha Bhardwaj

 

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