Tech Mahindra FY25 Results: Strong Deal Wins, Margin Growth & AI Push

Tech Mahindra FY25 Results: Stable Performance, Focused Strategy, and Solid Deal Wins

Tech Mahindra shared its financial results and business updates for the fourth quarter (Q4) and full fiscal year 2025 (FY25). The company showed signs of recovery after a tough FY24 and is now focusing on stable growth, margin improvement, and building strong client partnerships.

Revenue and Profit Overview

In FY25, Tech Mahindra reported a revenue of $6,264 million. Growth in constant currency terms was just 0.3%, but this includes the impact of removing low-margin or loss-making businesses. In comparison, FY24 had seen a revenue drop of 5%.

For Q4FY25 alone, revenue stood at $1,549 million, showing no change from the previous quarter and a small 0.3% increase compared to Q4 last year.

Operating profit (EBIT) for FY25 was $607 million, which is a 60% rise from last year. The EBIT margin improved to 9.7%, thanks to better operational planning and cost-saving initiatives like Project Fortius. In Q4FY25, EBIT margin rose further to 10.5%.

Net profit (PAT) for Q4FY25 was $136 million, up 17% compared to the previous quarter and 71% higher than the same period last year. The PAT margin increased to 8.7%.

Tech Mahindra also generated $613 million in free cash flow during FY25 and announced a final dividend of ₹30 per share, bringing the total dividend for the year to ₹45 per share—a 12.5% rise over last year.

Performance by Sector

Let’s look at how Tech Mahindra performed across different industries:

BFSI (Banking, Financial Services & Insurance) grew by 5.2% during FY25. The company added three of the top 15 global banks to its client list and now serves one in three BFSI companies globally.
Retail saw a 4.5% growth, backed by volume increases and new client wins.
Healthcare grew 3.4%, with several new deals across different regions.
Manufacturing declined by 1%, mainly due to weaker performance in the second half, especially in the auto sector. However, the company is investing in new capabilities and opened a manufacturing innovation center in Chennai.
Communications dropped 4.2%. This segment still faces challenges, although signs of improvement were seen in Europe and APAC. Notably, Comviva, a Tech Mahindra subsidiary, recorded its best performance since being acquired in 2012.
Hi-Tech remained flat due to macro pressures.
By geography: Americas dropped 2%, Europe was flat, and the rest of the world (mainly APJ) grew by 5.9%.

Strong Deal Wins in FY25

Tech Mahindra signed new deals worth $2.7 billion in FY25—a 42.5% increase over the previous year. In Q4 alone, it won deals worth $798 million, up 60% compared to the same period last year.

Some notable Q4 wins include:

Setting up device testing labs for a major US telecom company.
Improving customer experience for a large Americas telco.
Managing private cloud infrastructure for a global enterprise software leader.
Supporting a US healthcare firm with SaaS onboarding.
Handling IT infrastructure for a US aerospace company.
Building a global engineering center for a US retailer focused on data and AI.

The company says its deal wins are now more about strategic partnerships than just cost-based outsourcing.

New Initiatives and Growth Focus

Expanding Services and Capabilities

Tech Mahindra entered the consulting business by launching TechM Consulting, led by industry veteran Arjun Saxena. The company is also boosting its digital transformation and experience design offerings, with new leadership brought in to build this capability.

AI as a Core Strategy

Under the theme “AI Delivered Right”, Tech Mahindra is using AI to:

Boost productivity in operations and development.
Deliver full-scale business transformation.
Bring innovation through AI-powered analytics and tech redesign.
Ensure safe and secure use of AI.

A key example is British Telecom, where Tech Mahindra deployed AI for IT operations, field services, and back-office automation. The company is also working with NVIDIA, Google Cloud, Qualcomm, Rakuten Symphony, and others on AI projects.

Sector and Market Focus

Tech Mahindra is paying special attention to:

BFSI: With focus areas like insurance, payments, and banking systems.
Telecom: Using Comviva’s software to offer AI-powered solutions.
Manufacturing: Adding domain knowledge and innovation centers.
Retail: Leveraging platforms like SAP and creative agencies like Pininfarina.
Geographies: Investments are growing in the Americas, Europe, APJ (Japan, Singapore, Australia), India, and the Middle East. Around 75% of its sales team is now in these priority markets.

The company is also building tailored solutions for Global Capability Centers (GCCs), based on its experience working with large clients like BT.

Improving Margins and Operations

Project Fortius is at the center of Tech Mahindra’s plan to improve profitability. It focuses on:

Better pricing for niche skills.
Automation and lean delivery in fixed-price projects.
Combining portfolios of acquired companies like BORN and HCI.
Optimizing the mix of onsite and offshore work.

ERP rollout is already 60% complete and is expected to finish by FY26.

The company also launched a learning platform called RAPID for employee skill development and continues to invest in leadership training and certifications.

Tech Mahindra is simplifying its processes, managing costs tightly, and trying to improve internal collaboration across teams.

ESG and Group Collaboration

Tech Mahindra is aiming for Net Zero emissions by 2035, with external validation of its goals. It’s also a top performer in global sustainability indexes like DJSI and CDP.

Within the Mahindra Group, Tech Mahindra is working closely on Industry 4.0 projects, electric vehicle platforms, and digital solutions for Mahindra Finance.

Industry Outlook and Management Comments

The management highlighted that while FY25 showed signs of improvement, macro challenges continue—especially in the auto and hi-tech sectors, and in the US market where discretionary spending is tight.

In telecom, new investments are low, but there are chances in consolidation and automation.

Some clients delayed renewals in the BPO segment, but recovery signs were visible in March.

Even with big deal wins, revenue growth may stay limited in the short term due to overall industry pressures.

However, Tech Mahindra remains committed to improving margins and expects to reach a 15% EBIT margin by FY27. If margins improve faster than planned, the company may reinvest those gains into building more capabilities rather than letting them flow straight to profit.

For revenue growth, the company hopes to catch up with peers by FY27. FY26 is expected to be a year of faster progress but not a sharp jump.

Management said they’re careful about contract and margin risks and won’t chase growth at any cost.

In BPO, the company is moving from traditional voice support to AI-based hybrid models, where humans and machines work together.

It also said that most of the loss-making parts of the business were shut down in FY24 and FY25. The current focus is to improve underperforming segments instead of exiting more.

Key Metrics and Insights

Here are some other useful details from the FY25 results:

Tech Mahindra now works with 162 Fortune 500 clients, adding around 10% of this base in FY25.
Net Promoter Score (NPS) improved significantly, especially among CXO-level stakeholders.
Employee satisfaction reached a three-year high, with faster response on internal processes like expense claims.
Over 70% of lateral hires for general roles accepted their offers; for niche roles, the acceptance was lower.
Gender diversity across the workforce also improved during the year.

Investor Questions: What They Asked, What Tech Mahindra Said

Margins: The company saved 20–30 basis points by cutting non-core work and got a 30–40 basis point benefit from currency changes.
Deal wins: Management said strong wins came from deeper relationships, not just lower prices.
Manufacturing: Exposure to Europe auto sector is low; more traction seen in Japan and process manufacturing.
BPO and GenAI: Most of the BPS business is now tech-enabled; only one-third is voice-based.
Deal Pipeline: The company expects $600–800 million in deal wins per quarter, depending on market conditions.

Final Words from Management

Tech Mahindra’s leaders spoke in a clear and grounded tone. They’re not over-promising but are confident that the hard work done in FY25 will help in FY26 and beyond.

The focus remains on execution, margin improvement, and AI-led transformation. Project Fortius will continue to drive profits, and investments in consulting and AI are expected to become major growth areas.

The company also maintained a high dividend payout, showing its commitment to shareholder returns.