TechM reports strong growth in Q2 driven by AI, digital services

IT and digital solutions provider Tech Mahindra On Saturday reported consolidated profit after tax (PAT) of ₹ 1,250 crore in the quarter ended September 30, up 153.1% year-on-year and 46.8% quarter-on-quarter. The company posted revenue of ₹ 13,313 crore in the second quarter of fiscal year 2025, up 2.4% quarter-on-quarter and 3.5% year-on-year.

During this quarter, Tech Mahindra revealed a strategic partnership aimed at enhancing the adoption of generative AI (GenAI) and facilitating digital transformation across various sectors of Mahindra & Mahindra. Additionally, the company formed a partnership with Horizon3.ai, a provider of autonomous security solutions. This collaboration will see Tech Mahindra incorporate Horizon3.ai's NodeZero platform into its cybersecurity services, thereby enriching its offerings with advanced threat detection, AI-driven penetration testing, and insights on Governance, Risk, and Compliance (GRC).

Tech Mahindra also introduced ‘TechM VerifAI’, a comprehensive solution designed to validate and verify the outcomes of Artificial Intelligence (AI) and GenAI projects. This initiative will assist enterprises in validating the complete lifecycle of AI-based projects, enabling them to accelerate their AI initiatives effectively.

Mohit Joshi, Chief Executive Officer and Managing Director of Tech Mahindra said, “We continue to advance our strategic improvement initiatives despite the overall softness in the IT services industry. Our focus has been on strengthening client relationships and expanding our partner ecosystem while maintaining a strong emphasis on operational excellence through project Fortius, which has led to margin expansion for the third consecutive quarter.”

Rohit Anand, Chief Financial Officer of Tech Mahindra, noted that the company has experienced consistent performance in terms of increasing deal wins, revenue growth, cost optimization, and stable free cash flow generation as they progress towards their stated targets for FY27.
Tech Mahindra reported a total headcount at the end of the quarter at 154,273, up 6,653 quarter-on-quarter and 3,669 year-on-year.

“In line with our capital allocation policy, the board has declared an interim dividend of ₹ 15 per share,” he said.

Read more: Wipro’s net profit grows by 21% in Q2FY25

From July to September, Indian IT giants saw significant gains due to digital transformation contracts. On October 10, Tata Consultancy Services (TCS) kickstarted the Indian IT earning season for Q2 by posting strong growth fueled by investments in AI, cybersecurity, and cloud solutions, reporting major contracts in the retail sector with clients like Primark and McDonald's.

Infosys, India's second-largest IT provider, reported a 5% year-on-year revenue increase to ₹40,986 crore for Q2FY25, driven by large-scale projects. HCL Technologies, the third-largest firm, saw an 8.2% revenue rise to ₹28,862 crore, with a focus on data, AI, and digital engineering. Wipro, the fourth-largest, reported a 1.5% revenue increase to ₹22,301.6 crore, bolstered by significant cloud and digital transformation contracts. Midcap IT firms such as L&T Tech, LTIMindtree and Mphasis are also riding the digital boom for growth and profit.

Read more: LTIMindtree reports 7.7% profit growth, Mphasis posts 4.6% increase in Q2FY25

Indian tech firms are significantly investing in artificial intelligence (AI) to enhance their service offerings, optimize operations, and drive innovation. These companies are integrating AI into various sectors, including automation, analytics, and software development, to improve efficiency and deliver advanced solutions to their clients.