July 26, 2024
New Delhi, India
Q1 Results
Tech Mahindra reported its Q1FY25 results on July 25, showing a significant 23% year-on-year increase in net profit, reaching Rs 851.5 crore. This represents a 29% sequential growth, driven by portfolio shifts, volume growth, and effective cost management.
Key Financial Highlights:
- Net Profit: Rs 851.5 crore, up 23% YoY and 29% QoQ.
- Consolidated Revenue: Rs 13,005.5 crore, up 10% from the previous quarter.
- EBIT Margin: Improved to 8.5%, up 110 basis points from 7.4% in the previous quarter.
Market Expectations: Tech Mahindra’s results met street expectations. A Moneycontrol poll of 10 brokerages had predicted a Q1 net profit of Rs 861 crore and revenue of Rs 12,968 crore.
Performance Drivers: The earnings growth was primarily due to portfolio shifts, volume growth, and cost management. The company’s EBIT margin exceeded Moneycontrol’s estimate of 8%.
Deal Total Contract Value (TCV): The TCV for Q1 stood at $534 million, up from $500 million in the previous quarter.
Additional Financial Details:
- Revenue from Operations: Rs 13,005 crore, a 1% YoY decrease.
- EBITDA: Rs 1,564 crore, a 17% YoY growth, with margins improving by 190 basis points to 12%.
- Revenue in Constant Currency Terms: Fell by 1.2% YoY, but increased by 0.7% QoQ.
CEO’s Remarks: Mohit Joshi, CEO and MD of Tech Mahindra, commented on the results: “It is encouraging to see positive momentum in most industry verticals which has led to revenue growth and margin expansion in an otherwise seasonally weak quarter. We continue to focus on execution and are on track to achieve our stated goals for FY27.”
Client and Segment Performance:
- Active Clients: 1,165 at the end of June 2024, down from 1,172 in March 2024 and 1,225 in June 2023.
- Communications Segment: Revenue dropped nearly 10% YoY.
- Hi-Tech and Media Division: Revenue declined by 3.5% YoY.
- BSFI and Other Segments: Revenues fell by 3.5% and 5.5% respectively.
- Manufacturing Division: Achieved 6.4% YoY revenue growth.
- Healthcare and Life Sciences Segment: Improved by 6.1% YoY.
- Retail, Transport, and Logistics Segment: Experienced a 4.9% YoY increase.
CFO’s Remarks: Rohit Anand, CFO of Tech Mahindra, stated, “The Q1 results are a positive start for both the current turnaround year and our medium-term strategy. Our focus remains on investing in the business for long-term sustainable performance.”
Employee Details:
- Total Headcount: 147,620 at the end of June 2024, down from 148,297 a year ago.
- Attrition Rate: Steady at 10% over the past twelve months.
Stock Performance: Tech Mahindra’s shares closed 0.44% higher at Rs 1,540 on the NSE on Thursday. Today shares are trading at 1,514.05INR down −15.95 at 10:40 A.M.
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