Tech Mahindra Q1 Results: Net profit rises 23% to ₹851.5 crore, revenue drops 1.2% YoY; 5 key highlights

Tech Mahindra Q1 Results: Tech Mahindra announced its April-June quarter results for fiscal 2024-25 (Q1FY25) on Thursday, July 25, reporting a rise of 23 per cent in consolidated net profit at ₹851.5 crore, compared to ₹692.5 crore in the corresponding period last year. India's fifth-largest software company's revenue from operations in the first quarter of the current fiscal fell 1.2 per cent to ₹13,006 crore, compared to ₹13,159 crore in the year-ago period.

Also Read: Tech Mahindra's Project Indus develops Indian LLM under $5 million, an alternative to ChatGPT

Mohit Joshi, Chief Executive Officer (CEO) and Managing Director (MD) 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 seasonally weak quarter. We continue to focus on execution and are on track to achieve our stated goals for FY27."

Here are 5 key highlights of Tech Mahindra Q1 scorecard:

1.P&L Account: Net profit, revenue

Tech Mahindra's revenue is $1,559 million, a drop of 2.6 per cent year over year (YoY). The revenue in constant currency (CC) terms fell 1.2 per cent YoY. Tech Mahindra's operating profit margins widened by 1.90 per cent to 12 per cent. On the operational front, the earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 16.9 per cent YoY to ₹1,564 crore. Margin stood at 12 per cent, up 190 basis points (bps) YoY. Earnings per share (EPS) is at ₹9.62.

Also Read: Mahindra Group chairman Anand Mahindra says Tech Mahindra partnering with group companies to transform them

2.Headcount

The company's total headcount stood at 1,47,620 in Q1FY25, up 2,165 sequentially. The IT attrition rate LTM basis stood at 10.1 per cent, down 270 basis points sequentially. The total utilization, including trainees stood at 86.1 per cent in the June quarter.

3.Segment performance

The company's net profit rose on the back of demand recovery in its manufacturing and healthcare segments. Manufacturing segment saw a growth of 6.4 per cent, while healthcare and life sciences grew by 6.1 per cent in the June quarter.

4.Deal Wins

The Mahindra group company's net new deal bookings stood at $534 million, compared with $500 million in the previous quarter and $359 million in the year-ago period. The cash and cash equivalent stood at ₹8,055 crore as of June 30, 2024.

Roh it Anand, Chief Financial Officer, Tech Mahindra, said, "The Q1 results are a positive start both for 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 longterm sustainable performance."

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5.Collaborations

Tech Mahindra announced a collaboration with Dell Technologies and Intel to implement Tech M's Indigenous foundational large language model (LLM) Project Indus's 'GenAI in a box' framework globally. This solution will simplify the deployment of advanced Al models for enterprises. 

The company also collaborated with IBM to help businesses worldwide responsibly accelerate the adoption of generative Al (GenAI). The partnership enables TechM amplifAI suite of Al offerings and solutions, to integrate with IBM watsonx Al and data platform with Al Assistants to bring new GenAI and governance capabilities to enterprises.