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Having entered FY25 on a downward trajectory (see here), Tech Mahindra’s “turnaround year” saw the company both back (just) in positive top line growth territory and delivering much improved profitability. For the twelve months ended 31st March, revenue at the offshore major increased at constant currency by 0.3% yoy to $6.26bn with the associated EBITDA margin improving by 370 bps to 13.2%. There was positive news too on the business winning front. Tech Mahindra’s net new deal TCV in FY25 jumped by 42% yoy to $2.7bn.
Beneath the headlines, however, the performances across the company’s vertical sector and regional business portfolio were more of a mixed bag. Together accounting for around half of global turnover, sales in Tech Mahindra’s two largest industry focused units, communications and manufacturing, both declined in FY25. Conversely, revenue for the period from the financial services, retail & transport and health & life sciences segment groupings all delivered mid-single digit improvements.
From a geographic perspective, it was the company’s activities outside the Americas and Europe that showed the greatest resilience. Turnover in the “Rest of the World” was up by more than 4% yoy in FY25 to represent about a quarter of firm-wide sales. The Americas failed to return to positive growth during the year. Europe, after a slow start, picked-up momentum through the latter part of the fiscal to finish the period with revenue of c.$1.5bn, broadly flat against FY24.
No forward guidance was provided for either the current quarter or FY26. Tech Mahindra CEO and Managing Director, Mohit Joshi stated that he believes that the company has laid a strong foundation for its transformation journey. There were, however, one or two more worrying signs in the Q425 numbers that impetus may be waning. The period saw firm-wide revenue decline sequentially driven by an accelerating slowdown of business in the Americas. With global trading headwinds stiffening, Tech Mahindra may well find reigniting growth over the next twelve months to be a tall order.
Posted by: Duncan Aitchison at 09:14
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