Tech Mahindra posts over twofold profit surge to Rs 1,250 crore in Q2

Tech Mahindra , a leading IT services firm, has announced a remarkable increase in its consolidated net profit, which soared more than twofold to Rs 1,250 crore for the July-September quarter of the fiscal year 2024-25. This significant growth is primarily attributed to special income from asset sales, as detailed in the company's recent exchange filing.

In the same quarter last year, Tech Mahindra 's net profit stood at Rs 493.9 crore. The company also reported a revenue increase of 3.49 per cent, rising to Rs 13,313.2 crore compared to Rs 12,863.9 crore during the corresponding period of the previous year.

The increase in other income includes a gain of Rs 4,502 million from the sale of property, which encompasses freehold land, related buildings, and furniture and fixtures sold for a total consideration of Rs 5,350 million. This amount is expected to be received over a four-year period, accruing interest at 8.2 per cent per annum.

On a sequential basis, Tech Mahindra 's net profit grew by 46.81 per cent, while revenue increased by 2.36 per cent.

CEO Mohit Joshi highlighted the company's ongoing strategic improvements despite a challenging environment for the overall IT services industry. "We have focused on strengthening client relationships and expanding our partner ecosystem, while maintaining operational excellence through Project Fortius," he stated. This initiative, launched in April, aims for a 15 per cent operating margin over three years with an emphasis on organic growth.

CFO Rohit Anand noted consistent performance indicators, including increased deal wins and cost optimisation. The board has declared an interim dividend of Rs 15 per share as part of its capital allocation strategy. In the second quarter of FY25, the company reported a Total Contract Value (TCV) of USD 603 million from new deals.

Joshi stressed the firm's commitment to long-term sustainable transformation, with a focus on enhancing capabilities in key service lines and investing in technical specialisations. "We continue to invest in our fresher hiring program, building a workforce equipped with AI-first and cloud-first skills," he said.

Despite potential volatility this year as the company undergoes a turnaround phase, Joshi expressed confidence in the foundation being laid for a robust long-term franchise, supported by a strong leadership team and a clear strategic vision.

During the quarter, Tech Mahindra added 6,653 employees, increasing its total workforce to 154,273.

On Friday, shares of Tech Mahindra closed at Rs 1,688 apiece on the BSE, reflecting a decline of 0.68 per cent from the previous trading day.