Tech Mahindra (TECHM) Q4 24/25 earnings summary

Executive summary

• FY25 revenue was $6,264 million (Rs 52,988 Cr), with 0.3% constant currency growth, reflecting exits from non-core businesses and a disciplined approach to client selection.

• Operating profit (EBIT) rose 60% YoY to $607 million (Rs 5,138 Cr), with margin expansion driven by operational efficiencies and Project Fortius.

• PAT for FY25 was $502 million (Rs 4,252 Cr), up 80.3% YoY, with PAT margin at 8.0%.

• Large deal TCV reached $2.7 billion, up 42% YoY, with broad-based wins across industries and geographies.

• Strategic investments in AI, consulting, leadership, and prioritized markets, with launches such as TechM Consulting and advanced Manufacturing Xperience Centre.

Financial highlights

• Q4 FY25 revenue was $1,549 million (Rs 13,384 Cr), flat YoY in USD and up 4.0% YoY in INR; EBIT at $163 million (Rs 1,405 Cr), up 43.6% YoY.

• Q4 PAT was $136 million (Rs 1,167 Cr), up 71% YoY, with PAT margin at 8.7%.

• Free cash flow for FY25 was $613 million; Q4 free cash flow was $150 million.

• Diluted EPS for FY25 at Rs 47.91; Q4 EPS at Rs 13.15.

• Final dividend of INR 30/share, total FY25 dividend at INR 45/share, payout ratio of 104%.

Outlook and guidance

• FY26 is positioned as a year of acceleration toward FY27 goals, focusing on profitable growth, margin expansion, and return on capital.

• Management remains cautious due to macroeconomic headwinds, especially in manufacturing and high-tech, but expects stabilization in telecom and growth in BFSI and prioritized markets.

• Targeting EBIT margin of 15% and ROCE above 30% by FY27, with continued investment in talent, AI, and service line capabilities.