Tech Mahindra’s earnings is down 41%, yet it is improving

At a post-earnings analyst call on Thursday, Tech Mahindra’s CEO and MD, Mohit Joshi, outlined a three-year roadmap, stating that FY26 would be the “stabilization phase” and FY27 will be “Reaping returns.”

Tech Mahindra reported a 41% YoY decline in net profit for the March quarter, coming in at Rs 661 crore on Thursday. Revenue was Rs 12,871 crore, 6.2% less than a year ago.

Joshi, who formerly worked for Infosys, joined Tech Mahindra last year and predicted at a media conference that FY25 will be stronger than FY24.

The IT giant wants its EBIT Margin to reach 15% in FY27 and its top line growth to exceed that of its peers. Its EBITDA was Rs 1,408 crore in Q4, a 30.3% YoY decrease. In FY24, EBIT was 6.1%, a decrease of 530 basis points.

In the fourth quarter, the company’s overall contract value (deal wins) was $500 million. The CEO said, “FY24 posed its fair share of challenges for the IT services sector; nonetheless, amid the global economic uncertainties, we continue to observe a notable push towards digital adoption.” The company plans to integrate artificial intelligence into its products.

Joshi will prioritize the following verticals: manufacturing, BFSI, hi-tech, telecom, and healthcare & lifesciences. The Americas, Europe, and the rest of the world’s prioritized nations will be its top regions.