Analysts say the company’s performance is affected by challenges in certain industries, but will be carried over by Project Forfaus and seasonal Comviva.
IT Company Tech Mahindra Ltd may report a decline in revenue due to increased margins in the quarter ending March 31, 2025.
Analyst reports said the company’s performance will be affected by challenges in certain industries, but will be carried over by Project Forfaus and seasonal Comviva. In the last quarter, the company reported a decline in profits.
Tech Mahindra will report on the results of the fourth quarter and FY25 later today.
Motilal Oswal Financial Services expects Tech Mahindra’s revenue growth rate will fall by 0.8% due to around 50% of revenue as the recovery in communications and manufacturing has decreased. The broker has pointed out that communications verticals are stable, but expects recovery to take time. “The trading rate victory has improved major vertical three-quarters such as Telecom and High Tech. The company expects to be able to deliver a large amount of TCV in the fourth quarter,” the report said.
From a margin point of view, Motilal Oswal expects a 10 basis points (BP) increase despite the wage hikes due to Project Forfaus. Furthermore, it noted that the outlook for CMEs in particular in the US and manufacturing industries will be of critical monitoring possible.
“Techm’s bottom-up conversion appears to be relatively independent of discretionary spending. There is room for future margin improvements as communication recovery potential and operational efficiency have been improved.”
Elara Capital expects to report a 0.7% decline in revenues in the fourth quarter due to weaker high-tech and BPO services lines. However, it is expected to be negated by seasonally powerful Comviva numbers.
Contrary to Motilal Oswal, Elara Capital expects flat sequential growth in margins supported by cost rationalization under the project “Fortius.”
“Tech Mahindra must drop sequentially due to seasonally driven weakness and uncertain demand environments,” Elara Capital said.
Nuvama’s research remains negative for Tech Mahindra, as it expects a company-specific challenge to reduce revenue by 0.7% and a 1.5% QOQ at USD. According to the report, the seasonal benefits of Furlough Reversal and Comviva are offset by headwinds in high tech, with few low-distance trading closures. Additionally, it is expected that margins will remain flat in sequence.
“Please note the revenue and margin guidance for FY27, as well as management’s comments on its progress,” the Nvama survey stated.
Released on April 24, 2025
