Tech Mahindra Q1 Results: Consolidated PAT Jumps 23% YoY to Rs 851 Crore, Beats Estimates

Mahindra Group-backed IT giant, Tech Mahindra posted strong double-digit growth in terms of bottom-line during the quarter ending June 30, 2024, period. Q1FY25 PAT is up by 28.8% QoQ and 23% YoY to Rs 851 crore. Revenue witnessed a mixed performance with revenue lower by 1.2% YoY but marginally up 1% QoQ to Rs 13,005 crore. Despite the mixed top-line, Tech Mahindra's Q1 earnings are broadly upbeat across verticals owing to robust cost measures.

Meanwhile, EBITDA at Rs 1,564 crore, registering growth of 11.1% QoQ and 16.9% YoY. EBITDA margins expanded by 110 bps QoQ and 190 bps YoY to 12%.

In terms of dollars, revenue is at $1,559 million, up 0. 7% QoQ, down 2.6% YoY. EBITDA at $188 million, up 10.8% QoQ, 15.3% YoY. Profit after tax (PAT) at $102 million, up 28.6% QoQ, up 21.3% YoY.

Mohit Joshi, Chief Executive Officer and Managing Director, of Tech Mahindra, said, "It is encouraging to see positive momentum in most industry verticals which has led to revenue growth and margin expansion in an otherwise seasonal."

While Rohit Anand, Chief Financial Officer, Tech Mahindra, added, "The Q1 results are a positive start both for the current turnaround year as well as for our medium-term strategy. As we mentioned in our strategic priorities, our focus continues to be on investing in the business for long-term sustainable performance."

On the Q1 results, Pritesh Thakkar - Research Analyst, Prabhudas Lilladher said, Tech Mahindra's earnings beat on all fronts led by strong cost measures, courtesy of BPO.

Thakkar highlighted that USD revenue is up 0.7% QoQ CC (up 0.7% QoQ in USD), above our consensus estimates of +0.3%/+0.5% CC. Also, IT service (INR) growth was weak down 0.7% QoQ, while BPO (INR) was up 11% QoQ. He added, "CME witnessed a decline of 1.9%, while Retail, Manufacturing and Healthcare were up 5.2%, 2.4% and 7.9% QoQ, respectively. However, BFSI was up 0.7% QoQ."

As of June 30, 2024, the company's total headcount stood at 147,620, a net addition of 2,165 employees on a quarter-on-quarter basis. However, the headcount is down by 677 employees year-on-year.

Tech Mahindra offers technology consulting and digital solutions to global enterprises across industries, enabling transformative scale at unparalleled speed. With 145,000+ professionals across 90+ countries helping 1100+ clients, TechM provides a full spectrum of services including consulting, information technology, enterprise applications, business process services, engineering services, network services, customer experience & design, AL & analytics, and cloud & infrastructure services.