Tech Mahindra (TECHM) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 revenue was $1.567 billion (₹132,856 million), up 1.3% YoY in constant currency but down 0.4% YoY and 1.3% sequentially due to currency headwinds.

• Net new deal wins totaled $745 million, with significant multi-year contracts in telecom, hi-tech, automotive, chemicals, and manufacturing; LTM deal wins improved to $2.4 billion.

• EBIT margin improved to 10.2%, up 480 bps YoY and 60 bps sequentially, driven by delivery efficiency, pricing, and cost optimization.

• Free cash flow was $199 million, with cash and equivalents at $799 million (₹6,841 crores).

• Leadership strengthened with key hires and strategic partnerships in technology, cloud, and cybersecurity, supporting transformation and growth.

Financial highlights

• EBIT for the quarter was $159 million (₹1,350 crore), up 88.1% YoY and 4% sequentially; PAT was $116 million (₹983 crore), up 92.6% YoY, with a margin of 7.4%.

• Free cash flow conversion was robust at 172% of PAT; DSO improved to 88 days, down 6 days QoQ and 3 days YoY.

• Diluted EPS for the quarter was ₹11.08.

• Hedge book at $2.1 billion, with a mark-to-market loss of $4.7 million.

• Utilization (including trainees) was 85.6%; IT LTM attrition at 11.2%.

Outlook and guidance

• Management expects continued margin expansion and robust deal momentum to support long-term goals, aiming for industry-average or better growth by FY27.

• 2025 is expected to show incremental improvement over 2024, with a positive trajectory and no major macro shifts.

• Wage hikes in Q4 are expected to impact margins by 1–1.5%, but cost and productivity initiatives aim to offset this.

• Margin expansion toward the 15% EBIT target for FY27 remains a key focus.