Tech Mahindra (TECHM) — concall transcript

📢 Key Event
Tech Mahindra reported Q2 FY'25 revenue growth of 2.2% YoY and 1.9% QoQ, with EBIT margin expanding to 9.6% and new deal wins of $603 million.

🔄 What Changed
EBIT margin expanded by 110 bps QoQ to 9.6%, and new deal wins reached $603 million, marking sequential improvement in both profitability and deal momentum.

🔮 What's Next
Management expects margin improvements to sustain through fiscal '27, targeting single-digit improvements driven by fixed-price governance, subcontractor reduction, and pricing optimization, with investments targeting benefits from year three through year five.

💡 Investor Takeaway
Investors should note that margin expansion and disciplined large deal wins are central to Tech Mahindra's medium-term growth strategy, with management confident in sustaining momentum despite regional softness.

Tech Mahindra reported Q2 FY'25 revenue growth of 2.2% YoY and 1.9% QoQ, driven by Europe (4.1% YoY) and other regions, with new deal wins of $603 million. EBIT margin expanded to 9.6% (+110 bps QoQ), supported by Project Fortius and cost discipline, while interim dividend was set at Rs 15/share. The company highlighted investments in AI, cloud, and industry-specific capabilities, though softness persisted in communications and manufacturing. Management indicated back-half investment acceleration, stable demand with regional variations, and confidence in sustaining margin improvements through fiscal '27, targeting single-digit improvements and long-term growth in BFSI, healthcare, and automotive verticals.

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About Tech Mahindra Ltd (TECHM)

Information Technology · IT - Software · Listed on BSE

Market Cap: ₹1,58,965.4 Cr P/E: 28.0 ROE: 17.4% ROCE: 24.8% Div Yield: 3.14%

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"How will margin improvements be sustained amid ongoing wage hike pressures?" "What is the expected contribution of BPO transformation to overall margin growth?" "How does the company assess the risk of telecom client budget pressures impacting future large deals?"

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🔥 Also filed on 30 September 2024

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Source: Stock Announcements. Analysis by StockFin.ai. For informational purposes only — not investment advice.

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