Shares of Tech Mahindra Ltd rose as much as 4.34% on Monday to hit a 52-week high after the IT services company reported a 153% increase in its second-quarter net profit.
Profit of Tech Mahindra zoomed to ₹1,250 crore for the quarter ended September compared with ₹493 crore in the corresponding quarter last year. Revenue from operations rose 3.5% year-on-year to ₹13,313 crore for the September quarter.
Reacting to the earnings, shares of Mahindra Group-owned IT firm hit a 52-week high of ₹1,761.30 on the BSE.
Tech Mahindra’s operating profit or earnings before interest, taxes, depreciation, and amortisation jumped 63.2% year-on-year to ₹1,750 crore.
“We continue to progress on our strategic improvement efforts even as the overall IT services industry has remained soft. We have focused on strengthening client relationships and expanding the partner ecosystem while maintaining a sharp focus on operational excellence through project Fortius, which has resulted in an expansion of margins for the third sequential quarter,” says Mohit Joshi, chief executive officer and managing director, Tech Mahindra.
Total headcount at the end of the quarter 154,273, up 6,653 QoQ and 3,669 YoY • LTM IT attrition 10.6%
Cash and Cash Equivalent at the end of the quarter ₹ 6,566 crores • Interim dividend declared ₹ 15 per share
“This quarter we see consistent performance around increasing deal wins, revenue growth, cost optimisation and steady free cashflow generation as we continue our journey towards FY27 stated targets,” says Rohit Anand, Chief Financial Officer, Tech Mahindra.
The IT company’s EBIT margin expanded 110 basis points to 9.6% in Q2 FY25. Tech Mahindra, which has underperformed its peers in the IT industry, unveiled a three-year turnaround roadmap to increase revenue and doubling operating margin to 15% by the financial year 2026-27.
In the ongoing fiscal, Tech Mahindra says it will be in the “turnaround” phase, focusing on anchoring the organisation, investing into key accounts, markets and service lines.
The IT firm also introduced Project Fortius, which aims to cut employee costs and hire more freshers. It also aims to increase revenue from high-yield geographies and optimise costs. The company is also making early investments in 6G – telecom is a key vertical for the company.
In Q2, the communications vertical contributed 33.4% to Tech Mahindra’s total revenue while manufacturing contributed 17.2%.
Revenue from Americas contributed 51% to total top line while Europe’s contribution was 24%.
TechM’s net new deal wins stood at $603 million during the quarter.
