Tech Mahindra Q4 Profit at ₹661 crore, down 41%

The consolidated net profit in Q4FY24 came in at ₹661 crore which declined by 40.88%, as compared to Q4FY23, when it reported ₹1,118 crore. Almost one third of the revenue is contributed by the CME industry. Consolidated PAT at ₹2,358 crores; down 51.2% YoY for FY24.

Revenue

Consolidated net revenue of Tech Mahindra Ltd. in Q4FY24 stood at ₹12,871 crore, which declined by 6.18% YoY from ₹13,719 crore in Q4FY23. Revenue for the financial year ₹51,996 crore; down 2.4% YoY. Geographically, America contributed 50.8% whereas Europe contributed 24.2% to the revenue. Almost one third of the revenue is contributed by the CME industry.

Client Breakup

There is a decline of 5% YoY for the quarter in the client base which is greater than equal to $1 million. The client base which is greater than equal to $5 million increased by 2.15% YoY for the quarter.

EBITDA performance

EBITDA stood at ₹1,099 crore in Q4FY24 that decreased by 39.25% YoY. For Q4FY23, it had posted an EBITDA of ₹1,809 crore. EBITDA margin as of Q4FY24 was at 8.54% that declined by 21 basis point YoY against the same quarter, the previous year. EBITDA at ₹4,965 crores; down 38.2% YoY for FY24.

Net Profit

The consolidated net profit in Q4FY24 came in at ₹661 crore which declined by 40.88%, as compared to Q4FY23, when it reported ₹1,118 crore. The net profit margin in Q4FY24 came in at 5.14% which rose by 1.25% YoY. The net profit margin for Q4FY23 was 3.89%. Consolidated PAT at ₹2,358 crores; down 51.2% YoY for FY24. This could be attributed to the challenges faced in the IT industry and high interest rate environment which lowers the discretionary spending of the clients.

**Total headcount at 145,455 down 795 QoQ. Cash and Cash Equivalent at ₹7,912 crore as of March 31, 2024 **

Vertical Performance

Only the manufacturing vertical performance has grown at 6.2% and the communications, media & entertainment vertical performance has shown a decline of 16.5%. The TCV (Total Contract Value) for Q4FY24 stood at $500 million.

Dividend

Recommended Final Dividend of ₹28/- per equity share of the face value of ₹5/- each (560%) for the financial year ended 31st March, 2024, subject to the Members’ approval at the forthcoming Annual General Meeting of the Company.

Management Commentary

Mohit Joshi, Chief Executive Officer and Managing Director, Tech Mahindra, said, "As we step into FY '25, we look forward to improvement in clients spending, which fuels our optimism for a better revenue performance ahead. Our unique ability to enable customers with transformative scale at unparalleled speed, differentiates us from competitors. FY'24 posed its fair share of challenges for the IT services sector; yet, amidst the global economic uncertainties, we continue to observe a notable push towards digital adoption."

Rohit Anand, Chief Financial Officer, Tech Mahindra, said, "With another quarter of robust cash generation, we have reported improvement in deal wins and operating margins in Q4FY'24, which has enabled consistent dividend distribution. We are confident that our actions will lead to steady earnings growth in the coming years. We will continue to focus on operational excellence and cost savings to deliver superior shareholder returns."

Share Price Performance

The stock closed at ₹1,190.10 at BSE showcasing a marginal gain of 0.34%. The stock has given 19.52% return in the past 1 year.