Tech Mahindra Q4FY25 results: Net profit up 76.5% at Rs 1,167 crore

IT services firm Tech Mahindra reported a profit of ₹1,167 crore for the fourth quarter of financial year 2024-25. The profit rose 76.5 per cent from the corresponding quarter of the last financial year. The rise in profit was due to margin expansion and the effective tax rate coming down due to one-off benefits.

 

Revenue for the fourth quarter increased 4 per cent year-on-year (Y-o-Y) to ₹13,384 crore. On a sequential basis, revenue was up 0.7 per cent. In US dollar terms, revenue was flat Y-o-Y and down 1.2 per cent quarter-on-quarter (Q-o-Q).

 

The company logged a profit of ₹4,252 crore in FY25, up 80 per cent Y-o-Y, and revenue grew 1.9 per cent at ₹52,988 crore.

 

Mohit Joshi, chief executive officer and managing director, Tech Mahindra, said, “This year, we laid a strong foundation for our transformation journey. The environment has changed materially, especially since January. During that time, we were witnessing an upsurge of excitement from clients in the US. But some of this has not been stalled due to the volatility in the market and specifically in the manufacturing sector.”

 

Tech Mahindra signed a total contract value (TCV) of $2.7 billion for FY25, up 42 per cent Y-o-Y. For the fourth quarter, the company signed TCV of $798 million, up from $745 million in the December quarter. 

 

The firm’s growth was driven by retail, transport and logistics, and BFSI, which grew 10.3 per cent and 6 per cent, respectively. On a sequential basis, growth was driven by BFSI, with a rise of 2.4 per cent. Manufacturing was down 5.5 per cent Y-o-Y and down 0.2 per cent sequentially.

 

This uncertainty in global markets will also weigh on the firm’s turn-around plans. While Joshi said that the first year targets are in line, the margin target will be focused. “Compared to FY25, we were hoping that the industry will come back to normal growth but now that looks difficult. We do have significant market levers; growth will always be relative to industry…but we have set a hard target for margins for FY27,” he added. 

 

The company said that growth for FY26 will be driven by Europe and the rest of the world.

 

“This year, we delivered operational excellence by achieving a 60 per cent rise in operating profit. We raised our dividend per share by 12.5 per cent, and returned 85 per cent of our free cash flow to shareholders,” said Rohit Anand, chief financial officer, Tech Mahindra.

 

The company reported a headcount of 148,731, a drop of 1,757 compared to Q3 FY25. Attrition for the firm was at 11.8 per cent. However, the company did not give any hiring target for FY26.

 

The firm also announced that it is setting up a consulting business unit called TechM Consulting, which would allow them to give end-to-end offerings. Joshi also said that the firm is launching its Generative AI offerings.