Tech Mahindra shares gain over 3% after company beats Q2 estimate; Should you Buy, Sell, or Hold?

Shares of Tech Mahindra gains over 3% to open at Rs 1,745 on NSE today after reporting a remarkable 153.1% year-on-year (YoY) jump in net profit for the second quarter of FY25, reaching Rs 1,250 crore. The company’s revenue rose by 3.5% YoY to Rs 13,313 crore during the same period.

Revenue Performance

In constant currency terms, revenue grew by 0.7% QoQ and 1.2% YoY. However, revenue from the communications vertical declined by 1.7% YoY, while the banking, financial services, and insurance (BFSI) vertical posted a YoY growth of 4.5%. The technology, media, and entertainment segment saw a 2.4% rise in revenue.

Sequential Growth

On a quarter-on-quarter (QoQ) basis, Tech Mahindra saw a 46.81% increase in profit and a 2.36% rise in revenue.

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Also ReadTech Mahindra Share Price Today Live Updates, 21 Oct, 2024: Tech Mahindra on the radar

Profit Margins and Deal Wins

The company’s profit after tax (PAT) margin stood at 9.4% for the quarter, an increase of 280 basis points (bps) QoQ and 560 bps YoY. Tech Mahindra secured new deal wins with a total contract value (TCV) of $603 million during the quarter.

Interim Dividend Announcement

Alongside its quarterly earnings, Tech Mahindra announced an interim dividend of ₹15 per equity share. The record date to determine shareholder eligibility for the dividend has been set for November 1.

Attrition Rate and Workforce Growth

Tech Mahindra’s IT attrition rate rose to 11% in Q2FY25, compared to 10% in the previous quarter. The company’s total headcount increased by 4.5% QoQ to 154,273 employees.

Also ReadTech Mahindra beats Street estimates, profit gets boost by other income

Tech Mahindra’s strong profit growth and strategic focus on securing new deals position the company well, despite challenges in specific verticals and rising attrition.

Stock Performance in Last One Year

Tech Mahindra shares have delivered positive returns across various time frames.

 » Read More

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