Tech Mahindra Q4 FY25: Net Profit Jumps 77% in Q4
Tech Mahindra reported a remarkable 77% increase in its consolidated net profit, reaching Rs 1,167 crore for Q4FY25, compared to Rs 661 crore in the same period last year. The significant rise in profit is primarily attributed to reduced subcontracting expenses and a deferred tax gain. In the previous quarter, the IT services firm had posted a net profit of Rs 983.2 crore, which also reflected positive growth.
Highlights:
Q4FY25 net profit: Rs 1,167 crore, up 77% YoY.
Profit boost driven by lower subcontracting expenses and deferred tax gain.
Revenue from Operations Sees 4% Growth
Tech Mahindra’s revenue from operations increased by 4% to Rs 13,384 crore in Q4FY25, compared to Rs 12,871 crore in the same quarter last year. This growth indicates a solid performance despite various macroeconomic challenges. The steady revenue growth highlights the firm’s ability to maintain operational resilience, especially in a competitive IT services market.
Highlights:
Q4FY25 revenue from operations: Rs 13,384 crore, up 4% YoY.
Consistent revenue growth amid challenging conditions.
Final Dividend Declaration and Share Price Movement
The company also declared a final dividend of Rs 30 per share for FY25, reflecting its strong financial performance. Tech Mahindra’s shares saw a slight gain, settling 0.49% higher at Rs 1,446.6 per share on the NSE on April 24, indicating positive investor sentiment following the announcement.
Highlights:
Final dividend of Rs 30 per share for FY25.
Share price closed at Rs 1,446.6, up 0.49%.
Strategic Investments and Transformation Journey
CEO Mohit Joshi highlighted the company’s transformation efforts, stating that the year had laid a solid foundation for its journey ahead. Strategic investments in leadership, people, and capabilities were crucial in positioning Tech Mahindra for future success. The company’s deal wins amounted to $2.7 billion, a 42% year-on-year increase, underscoring the deepening client partnerships and the firm’s strengthening market position.
Highlights:
$2.7 billion in deal wins, up 42% YoY.
Investments in leadership and capabilities to drive future growth.
Operational Excellence and Strong Financial Returns
Chief Financial Officer Rohit Anand emphasized the company’s operational excellence, citing a 60% increase in operating profit. This surge in profit was achieved through strong execution, operational leverage, and disciplined cost management. The firm raised its dividend per share by 12.5% and returned 85% of its free cash flow to shareholders, reinforcing its commitment to shareholder value.
Highlights:
Operating profit up 60%, driven by strong execution.
Dividend per share raised by 12.5%, with 85% free cash flow returned to shareholders.
Workforce Adjustments and Sector Challenges
Tech Mahindra’s total headcount stood at 1,48,731, reflecting a decrease of 1,757 employees on a sequential basis, but an increase of 3,276 employees compared to the same period last year. The company continues its turnaround efforts under CEO Mohit Joshi, despite challenges stemming from its reliance on the communications vertical, which contributes over a third of its revenue.
Highlights:
Total workforce: 1,48,731, with a slight sequential decrease.
Turnaround efforts continue under CEO Mohit Joshi.
Pressure in Communications Vertical and Signs of Recovery
The communications vertical, which has been under pressure due to macroeconomic challenges, saw a 2.2% year-on-year decline in revenue for the quarter. CEO Mohit Joshi attributed this to ongoing industry headwinds and a prolonged downturn in the sector. However, he also noted that the company was seeing “signs of stability returning” in the European and Asia Pacific markets, offering hope for recovery in this key segment.
Highlights:
Communications segment revenue fell by 2.2% YoY.
Signs of recovery in Europe and Asia Pacific markets.
Growth in Order Bookings
Tech Mahindra saw a substantial rise in order bookings, reaching $798 million, up from $500 million a year earlier. This increase indicates strong demand for the company’s services, and the growth in new orders is likely to contribute positively to its revenue in the coming quarters.
Highlights:
Order bookings increased to $798 million from $500 million YoY.
Positive growth in order volume signals strong demand.
