Tech Mahindra Share Price Falls 2% Ahead Of Q3FY25 Results; What To Expect From This Mahindra Group Company?

Tech Mahindra Q3 Results Preview: Mahindra Group-backed IT giant, Tech Mahindra is all set to announce Q3 results for FY25. The company's share price, however, traded on a bearish tone ahead of its earnings. In the third quarter, Tech Mahindra is expected to report stable growth in constant currency revenue, while EBIT margins are expected to expand. Overall, Tech Mahindra is expected to report solid profitability in Q3FY25.

Tech Mahindra Share Price:

At the time of writing, Tech Mahindra's share price stood at Rs 1658.60 apiece on BSE, down by 1.83% with a market cap of Rs 1,62,341.62 crore. The stock was near its day's low of Rs 1657.30 apiece.

On BSE, the stock's 52-week high and low is at Rs 1,807.40 apiece and Rs 1,163.70 apiece respectively.

Tech Mahindra Q3 Results Preview:

Brokerage Kotak Institutional Equities said, ". We forecast moderate growth of 0.5% QoQ in c/c. Growth should be led by the ramp-up of improving deal wins. Growth will be marginally lower than in the earlier quarter due to a lack of seasonal kicker in BPO."

Further, Kotak expects a 40 bps increase in EBIT margins, resulting from the benefits of project Fortius. The margin expansion could have been higher but for currency headwinds. It also forecasts net new deal wins of US$700 mn, an improvement qoq and a material increase yoy. More importantly, new deals are won at a higher margin.

That being said, Kotak expects a solid FY2025E on profitability. The focus will be on the revenue acceleration path in FY2026.

Furthermore, brokerage IndSec expects cc qoq growth of +0.4% to +0.5%. This is due to currency headwinds, similar growth in telecom/enterprise verticals, seasonality impacted BPO segment, weak manufacturing to be offset by Comviva.

Moreover, IndSec expects EBIT margins to expand by 45bps qoq on the back of margin improvement program and delayed wage hike. Also, deal wins are expected to be around $600mn-$800mn.

During Q2FY25, Tech Mahindra posted consolidated net profit of Rs 1,250 crore, registering growth of 46.8% QoQ, up 153.1% YoY. While consolidated revenue from operations stood at Rs 13,313 crore, higher by 2.4% QoQ, up 3.5% YoY. Revenue grew by 0.7% QoQ, up by 1.2% YoY in constant currency terms. Total headcount at the end of the quarter 154,273, up 6,653 QoQ and 3,669 YoY.