Tech Mahindra Q4 Results: Net profit up 18.6%, revenue flat at ₹13,384 cr

Analysts say the company’s performance will be affected by challenges in specific verticals but will be carried forward by Project Fortius and seasonal numbers of Comviva. 

IT company Tech Mahindra Ltd is likely to report decline in revenues with incremental improvement in margins, in the quarter ending March 31, 2025.

Analyst reports said the company’s performance will be affected by challenges in specific verticals but will be carried forward by Project Fortius and seasonal numbers of Comviva. Last quarter, the company reported a drop in profits with flat revenue.

Tech Mahindra will be reporting its Q4 and FY25 results later today.

Motilal Oswal Financial Services expects Tech Mahindra’s revenue growth to fall by 0.8 per cent sequentially CC due to muted recovery in telecom and manufacturing, around 50 per cent of revenue. While the brokerage noted that the communications vertical has stabilised, it expects recovery to take time. “Rate of deal wins saw improvement in 3Q in key verticals such as telecom and hi-tech. We anticipate the company can deliver good deal TCV in Q4,” the report stated.

In terms of margins, Motilal Oswal expects it to grow by 10 basis points (bp) despite wage hikes due to Project Fortius. Further, it noted that the outlook on CME, especially in the US and manufacturing verticals, will be the key monitorable.

“TechM’s bottom-up transformation appears relatively independent of discretionary spending. With the potential for telecom recovery and improved operational efficiency, we see room for sustained margin improvement going forward,” it said.

Elara Capital expects the company to report a 0.7 per cent sequential revenue drop in Q4 due to weak hi-tech and BPO service line. However, it expects it to be negated by seasonally strong Comviva numbers.

Contrary to Motilal Oswal, Elara Capital expects flat sequential growth in margins, buoyed by cost rationalisation under Project ‘Fortius’

“Tech Mahindra should drop sequentially due to seasonality-led weakness and uncertain demand environment,” Elara Capital stated.

Nuvama Research remains negative on Tech Mahindra as it too expects revenue to decline by 0.7 per cent quarter-on-quarter (q-o-q) CC and decline 1.5 per cent q-o-q in USD owing to company-specific challenges. The benefits of furlough reversal and Comviva seasonality will be offset by headwinds in hi-tech and few low-margin deal closures, stated the report. Further, it also expects margins to remain flat sequentially.

“We shall watch out for the management comments on the FY27 revenue and margin guidance, and their progress on it,” said Nuvama Research.

Published on April 24, 2025