Tech Mahindra shares fall 5% after Q4 results; earnings breakdown here

Tech Mahindra share price today: Shares of Tech Mahindra tumbled nearly 5 per cent in Friday's intraday session after it missed the street's revenue estimates amid weakness in its communications and hi-tech verticals.

 

Tech Mahindra's stock fell as much as 4.7 per cent during the day to ₹1,375 per share, the worst intraday loss since April 7 this year, according to Bloomberg data. The stock trimmed losses to trade 1.93 per cent lower at ₹1,415 apiece, compared to a 1.32 per cent decline in Nifty50 as of 10:29 AM. 

 

The company's shares snapped a four-day winning streak on Friday and have recovered about 20 per cent from its recent lows of ₹1,209, which it hit early this month. The stock has fallen 17 per cent this year, compared to a 1.2  per cent advance in the benchmark Nifty50. The company has a total market capitalisation of ₹1.38 trillion, according to BSE data. 

 

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Tech Mahindra Q4 Results breakdown

 

The information technology (IT) firm reported a profit of ₹1,167 crore for the fourth quarter of financial year 2024–25 (FY25), marking a 76.5 per cent increase from the same quarter in the previous year. Sequentially, the bottom line grew 0.7 per cent. 

 

Revenue for the fourth quarter increased 4 per cent year-on-year (Y-o-Y) to ₹13,384 crore. This comes against ₹13,457.8 crore top line, which analysts tracked by Business Standard had estimated. 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).  

 

Teach Mahindra deal pipeline

 

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. 

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Tech Mahindra management commentary 

 

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.”

 

The IT services firm, which has been trailing its competitors and is currently undergoing a turnaround under Joshi, has faced additional challenges due to its reliance on the communications vertical, a sector whose revenue is closely linked to macroeconomic conditions.

 

This vertical accounts for over a third of the company’s revenue. In the latest quarter, revenue from the communications segment declined by 2.2 per cent compared to the previous year, a drop that Joshi attributed to "industry headwinds caused by a prolonged downturn in the sector." However, he noted that the company is beginning to see "signs of stability returning" in the segment, particularly in Europe and Asia Pacific.

   

 

About Tech Mahindra

 

Tech Mahindra is a provider of consulting-led integrated portfolio services. The company serves a wide range of customers, including telecom equipment manufacturers, telecom service providers, IT infrastructure service providers, business process outsourcing providers, and enterprise solution services across various sectors like BFSI (Banking, Financial Services, and Insurance), retail and logistics, manufacturing, energy and utilities, healthcare, and life sciences. Tech Mahindra delivers its IT and IT-enabled services through a global network of multiple locations.

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