Tech Mahindra Q2 net profit up 153% boosted by other income
The revenues of Tech Mahindra rose by 3.5% for the second quarter of FY25.
IT services firm Tech Mahindra on Saturday reported a more than two-fold jump in its consolidated net profit to Rs 1,250 crore for the July-September quarter, driven by special income from the sale of assets.
The Mahindra Group company posted a net profit of Rs 493.9 crore in the year-ago period, according to an exchange filing.
Revenue rose by 3.49% to Rs 13,313.2 crore in the second quarter of 2024-25 compared with Rs 12,863.9 crore earned in the same quarter of 2023-24.
Tech Mahindra CEO Mohit Joshi
“Other income includes a gain on sale of property of Rs 4,502 million which comprises of freehold land and its related buildings along with the furniture & fixtures sold for a consideration of Rs 5,350 million, receivable over a period of four years along with interest of 8.2% p.a,” the company filing said.
Sequentially, net profit rose by 46.81% and revenue by 2.36%.
"We continue to progress on our strategic improvement efforts even as the overall IT services industry has remained soft,” Tech Mahindra CEO Mohit Joshi said.
"We have focused on strengthening client relationships and expanding the partner ecosystem while maintaining a sharp focus on operational excellence through project Fortius, which has resulted in an expansion of margins for the third sequential quarter," Joshi said.
The CEO unveiled Project Fortius in April, a three-year plan to achieve a 15% operating margin with a focus on organic growth.
"This quarter we see consistent performance around increasing deal wins, revenue growth, cost optimisation and steady free cash flow generation as we continue our journey towards FY27 stated targets. In line with our capital allocation policy the board has declared an interim dividend of Rs 15 per share," Tech Mahindra CFO Rohit Anand said.
The company's TCV (Total Contract Value), or net new deal wins, stood at $603 million in the second quarter of FY25.
Joshi further said the company is on the right path for a long-term sustainable transformation, with its leading indicators moving in the right direction, and its 'Scale at Speed' narrative resonating in the market.
The Pune-headquartered firm added 6,653 employees during the quarter under review, bringing the total staff count to 1,54,273.
