Tech Mahindra (TECHM) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue was $1,559 million (₹130,055 million), up 0.7% (1.0%) QoQ but down 2.6% (1.2%) YoY in constant currency.

• EBIT margin expanded to 8.5% (up 110 bps QoQ, 170 bps YoY); PAT margin at 6.5% with PAT at $102 million (₹8,515 million), up 28.8% QoQ and 23.0% YoY.

• New deal wins totaled $534 million, diversified across telecom, healthcare, automotive, and public sector, with major contracts in multiple regions.

• Strategic focus on AI, digital transformation, and operational efficiency, including launch of Project Indus LLM and GenAI initiatives.

• Recognized as a leader in sustainability and GenAI, with major analyst accolades and TIME Magazine recognition.

Financial highlights

• EBIT for the quarter was $132 million (₹11,023 million), up 16.2% QoQ and 22% YoY; EBITDA margin at 12.0%.

• PAT stood at $102 million (₹8,515 million), representing 6.5% of revenue; EPS at ₹9.62.

• Free cash flow was $106 million, equating to 104% of PAT; cash and equivalents at $966 million (₹80,552 million) at quarter-end.

• DSO including unbilled was 93 days, up 1 day QoQ but improved by 5 days YoY.

• Tax rate reduced to 26.6%; expected to remain in the 26–27% range for the year.

Outlook and guidance

• Management expects continued positive momentum, is on track to achieve FY27 goals, and focuses on execution and long-term sustainable growth.

• Demand environment remains stable; any improvement could provide upside to margin targets.

• Wage hikes are deferred for now, to be revisited in the second half of the year based on financial performance.