Tech Mahindra’s net profit grows by 29% in Q1FY25

IT services firm Tech Mahindra announced its first-quarter financial results for FY25 on Thursday. The company reported a 29% increase to ₹851.5 crore in the net profit for this period, while the profit margin grew by 110 basis points to 8.5%. The chief executive officer Mohit Joshi credited the growth in the profit margin to three-year plan, Project Fortius. To be sure, the company’s margin was 6.1% in FY24 — lowest among the top six IT services firms.

Project Fortius was initiated at the end of the first quarter amid its profit plunging to over 50% in FY24, the steepest decline ever. It was announced by Joshi, who took over the company's helm after his appointment in December 2023. Under the project, the company is said to be focusing on organic growth and not considering acquisitions, to achieve a 15% operating margin and grow revenue faster than the top seven IT firms.

For the second quarter, Tech Mahindra reported a revenue of ₹13,005 crore, down 1.2% on a yearly basis. Sectors like manufacturing, retail, and healthcare showed positive momentum. While the core communications vertical declined, a third of overall revenue came from this sector. 

“It is encouraging to see positive momentum in most industry verticals which has led to revenue growth and margin expansion in an otherwise seasonally weak quarter. We continue to focus on execution and are on track to achieve our stated goals for FY27,” said Joshi.

The company also announced a solution for validating and verifying artificial intelligence (AI) and generative AI projects called TechM VerifAI. This solution will help enterprises validate their end-to-end lifecycle of AI-based projects, enabling them to scale their AI initiatives speedily. It is expected to help customers accelerate their time to move from the pilots and experiment stage to enterprise-level adoption by offering a framework for assessing, auditing, and certifying AI solutions across various domains and use cases.