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Tech Mahindra — Q4 FY25
Tech Mahindra reported Q4 FY25 revenue of $1,549M (flat YoY, -1.5% CC QoQ) and full-year revenue of $6,264M (+0.3% CC).
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Tech Mahindra reported Q4 FY25 revenue of $1,549M (flat YoY, -1.5% CC QoQ) and full-year revenue of $6,264M (+0.3% CC). EBIT margin expanded 310bps YoY to 10.5% in Q4, driven by Project Fortius savings and portfolio pruning. Full-year EBIT margin was 9.7%, up 360bps YoY. Deal wins surged 42.5% YoY to $2.7B TCV, with two >$100M deals in Q4. BFSI grew 5.2% YoY, while Comms declined 4.2%. Management highlighted macro headwinds in US auto and high-tech, but sees stabilization in European/APAC telecom. FY27 targets of peer-leading growth and 15% EBIT margin remain, but FY26 faces macro uncertainty. Risk: tariff impacts and delayed discretionary spending could pressure near-term revenue.
टेक महिंद्रा ने चौथी तिमाही में 1,549 मिलियन डॉलर की कमाई की, जो पिछले साल के मुकाबले स्थिर रही। पूरे साल की कमाई 6,264 मिलियन डॉलर रही। कंपनी का मुनाफा (EBIT मार्जिन) बढ़कर 10.5% हो गया, जो पिछले साल से 3.1% ज्यादा है। यह प्रोजेक्ट फोर्टियस से बचत और कमजोर कारोबारों को हटाने से हुआ। नए सौदों में 42.5% का उछाल आया और 2.7 बिलियन डॉलर के सौदे हुए। बैंकिंग क्षेत्र में 5.2% बढ़ोतरी हुई, जबकि दूरसंचार में 4.2% गिरावट आई। अमेरिकी ऑटो और हाई-टेक में मुश्किलें हैं, लेकिन यूरोप और एशिया में स्थिरता दिख रही है। FY27 के लिए 15% मुनाफे का लक्ष्य है, लेकिन FY26 में अनिश्चितता है। टैरिफ और कम खर्च से कमाई पर दबाव पड़ सकता है।
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Macroeconomic headwinds in US and auto sector
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Deal Wins TCV (LTM)
$2.7B
+42.5% YoY
Full-year total contract value of deal wins, broad-based across verticals and geographies.
Large Deal TCV (Q4)
$798M
+60% YoY
Quarterly large deal wins, including two deals over $100M each.
Fortune 500 Clients
162
+10% YoY
Number of Fortune 500 clients; added ~45 must-have accounts in FY25.
NPS Score Improvement
Top Quartile
From Median to Top Quartile
Net Promoter Score moved from median to top quartile in one year, with 40% of top 100 clients giving perfect scores.
What Changed vs Last Quarter
NEW
Revenue growth ahead of peer average by FY27
Goal to achieve revenue growth above peer average by FY27, supported by deal wins and market share gains.
NEW
Quarterly deal wins range of $600M-$800M
CFO indicated that the current deal win range of $600M-$800M per quarter is sufficient to support growth targets, with potential to increase if environment improves.
NEW
Continued investment in service lines and talent
Planned investments in service line capabilities, ecosystem, and talent, including consulting and AI, with ~1% margin impact from wage hikes and investments.
UPDATED
FY27 EBIT margin target of 15%
Management reiterated commitment to 15% EBIT margin by FY27, with linear improvement expected through Project Fortius and portfolio mix.
DROPPED
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.
DROPPED
Industry-leading growth by FY27
Management aims to deliver growth higher than peer average by FY27, supported by large deal pipeline and portfolio rebalancing.
DROPPED
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.
NEW RISK
Macroeconomic headwinds in US and auto sector
Management noted softness in US high-tech and auto sectors, with delayed BPS ramp-ups and cautious discretionary spending.
NEW RISK
Tariff impact on telecom and manufacturing
While telecom is currently exempt from tariffs, potential tariff changes and consumer slowdown could pressure client spending.
NEW RISK
Competitive pricing pressure in constrained budgets
Analyst questioned whether prudent deal strategy could be a risk if competitors become more aggressive on pricing.
NEW RISK
Revenue growth dependency on macro recovery
Management acknowledged that margin expansion requires revenue growth, and current macro stress may delay FY27 targets.
RISK GONE
Lumpy large deal pipeline
Large deal wins are inherently lumpy; a quarter without major closures could slow revenue growth momentum.
RISK GONE
Wage hike margin headwind in Q4
Wage hikes of 1-1.5% will pressure Q4 margins; offsetting levers may not fully compensate.
RISK GONE
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.
RISK GONE
Forex losses from cross-currency headwinds
Significant cross-currency headwinds impacted reported revenue; hedging may not fully offset if INR depreciation continues.
🤫 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 15% EBIT margin by FY27, with linear improvement expected through Project Fortius and portfolio mix.
Management noted softness in US high-tech and auto sectors, with delayed BPS ramp-ups and cautious discretionary spending.
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