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Tech Mahindra — Q3 FY25
Tech Mahindra reported Q3 FY25 revenue of ₹13,286 crore (+1.4% YoY reported) and EBIT margin of 10.2% (+60bps QoQ), driven by Project Fortius savings and pricing discipline.
bullish
high
✓ Verified against BSE filing
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Tech Mahindra reported Q3 FY25 revenue of ₹13,286 crore (+1.4% YoY reported) and EBIT margin of 10.2% (+60bps QoQ), driven by Project Fortius savings and pricing discipline. PAT stood at ₹983 crore with robust free cash flow of $199 million (172% PAT conversion). New deal wins reached $745 million, up from $603 million last quarter, led by telecom, BFSI, and healthcare. Management reiterated FY27 targets of industry-leading growth and 15% EBIT margin, citing strong pipeline and AI investments. Risks include lumpy deal flow, wage hike headwinds (1-1.5% margin impact in Q4), and persistent weakness in European auto and North American telco discretionary spend.
टेक महिंद्रा ने तीसरी तिमाही में 13,286 करोड़ रुपये की कमाई की, जो पिछले साल से 1.4% ज्यादा है। कंपनी का मुनाफा 983 करोड़ रुपये रहा। उन्होंने खर्च कम करने और सही कीमत तय करने से अपना मार्जिन (कमाई का प्रतिशत) 10.2% तक बढ़ाया। नए सौदों में 745 मिलियन डॉलर के ऑर्डर मिले, खासकर टेलीकॉम, बैंकिंग और हेल्थकेयर से। कंपनी का लक्ष्य 2027 तक 15% मार्जिन और तेज वृद्धि हासिल करना है। लेकिन कुछ जोखिम भी हैं - अगली तिमाही में वेतन बढ़ने से मार्जिन पर 1-1.5% का असर पड़ सकता है, और यूरोपीय ऑटो व अमेरिकी टेलीकॉम क्षेत्र में खर्च कम हो रहा है।
Promises0 met · 2 missedRisks4 trackedTranscriptfull text
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Lumpy large deal pipeline
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New Deal Wins
$745M
+23.5% QoQ
Net new deal wins increased from $603M in Q2 to $745M, driven by large multi-year deals in telecom and manufacturing.
DSO (including unbilled)
88 days
-6 days QoQ
DSO improved 6 days sequentially to 88 days, one of the lowest levels, aided by operational improvements.
Must-Have Accounts Added
40+ YTD
+12 in Q3
Over 40 new must-have clients onboarded in FY25 YTD, with 12 added in Q3; 24 now above $1M annual run rate.
Large Deal Wins (LTM)
$2.4B
+24% YoY
Last twelve months deal wins improved to $2.4B, reflecting sustained momentum in large deal conversions.
What Changed vs Last Quarter
NEW
Wage hike impact of 1-1.5% in Q4
Wage hikes effective Q4 FY25 will impact margins by 1-1.5%, but operating levers are expected to partially offset.
NEW
Industry-leading growth by FY27
Management aims to deliver growth higher than peer average by FY27, supported by large deal pipeline and portfolio rebalancing.
NEW
Continued investment in GenAI and partnerships
TechM will continue investing in GenAI capabilities, including sovereign LLMs, agentic AI, and partnerships with NVIDIA, AWS, and ServiceNow.
UPDATED
FY27 EBIT margin target of 15%
Management reiterated commitment to achieving 15% EBIT margin by FY27 through Project Fortius, pricing optimization, and productivity gains.
DROPPED
Fresher hiring target of 6,000+ for FY25
Company is on track to hire over 6,000 fresh graduates this fiscal year, with 2,000+ already onboarded in H1.
DROPPED
Subcon cost reduction to single-digit percentage of revenue
Management expects to reduce subcontractor costs as a percentage of revenue to single digits over time, supporting margin expansion.
DROPPED
Second-half investments slightly heavier than first half
Investments under Project Fortius (1.5% of margins) will be slightly more in H2 vs H1, but not materially different.
NEW RISK
Lumpy large deal pipeline
Large deal wins are inherently lumpy; a quarter without major closures could slow revenue growth momentum.
NEW RISK
Wage hike margin headwind in Q4
Wage hikes of 1-1.5% will pressure Q4 margins; offsetting levers may not fully compensate.
NEW RISK
Persistent weakness in European auto and North American telco
Manufacturing declined 2.5% QoQ due to Pininfarina and European auto pressures; North American telco discretionary spend remains challenged.
NEW RISK
Forex losses from cross-currency headwinds
Significant cross-currency headwinds impacted reported revenue; hedging may not fully offset if INR depreciation continues.
RISK GONE
Sustained weakness in telecom vertical
Communications vertical declined 1.7% YoY as clients prioritize cost savings; U.S. telecom remains stressed.
RISK GONE
Competitive pricing pressure in large deals
Management noted competitors making 'heroic assumptions' on productivity, potentially leading to aggressive pricing that TechM avoids.
RISK GONE
Furlough impact in Q3
Q3 is seasonally weak due to furloughs; management has limited visibility on magnitude this early.
RISK GONE
Auto sector softness
Manufacturing vertical declined 4% QoQ due to softness in auto, especially in Europe and U.S.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24, Q2 FY25, Q4 FY24
Communications vertical declined 1.7% YoY as clients prioritize cost savings; U.S. telecom remains stressed.
Fast read
Guidance and risk preview
Management reiterated commitment to achieving 15% EBIT margin by FY27 through Project Fortius, pricing optimization, and productivity gains.
Large deal wins are inherently lumpy; a quarter without major closures could slow revenue growth momentum.
View Risks →