Tech Mahindra (TECHM) Q2 24/25 earnings summary

Executive summary

• Revenue for Q2 FY25 was $1.589 billion (₹133,132 million), up 2.2% YoY and 1.9% QoQ, led by Europe and Rest of World, while Americas declined 2% YoY due to telecom client budget constraints.

• Margin expansion continued for the third consecutive quarter, with EBIT margin at 9.6% and PAT margin at 9.4%, driven by operational excellence initiatives.

• Net new deal wins totaled $603 million, with broad-based contributions and several strategic partnerships, including with Microsoft, Temenos, and Google Cloud.

• Interim dividend of ₹15 (INR 16 in some reports) per share declared.

• Multiple industry recognitions for sustainability and innovation, and expansion of service offerings in AI, BFSI, and manufacturing.

Financial highlights

• Q2 FY25 revenue was $1.589 billion (₹133,132 million), up 2.2% YoY and 1.9% QoQ; EBITDA margin at 13.1%, EBIT margin at 9.6%.

• PAT was $149 million (₹12,501 million), with a PAT margin of 9.4%.

• Free cash flow was $157 million; cash and equivalents stood at $784 million (₹65,660 million).

• DSO at 94 days; tax rate at 26.6%.

• Other income included a $54 million (₹4,502 million) gain from a land/property sale.

Outlook and guidance

• Management expects Q3 to be seasonally weaker due to furloughs, with demand environment largely unchanged except for softness in manufacturing, especially auto.

• Deal win trajectory in the $600–800 million range per quarter is targeted to achieve industry-average growth next year.

• Continued focus on margin expansion, cost optimization, and strategic investments to meet FY2027 targets.

• Continued investment in AI, digital transformation, and strategic partnerships to drive future growth.

• Management expects steady free cash flow generation and operational excellence.