Tech Mahindra (NSE: TECHM) has announced an interim dividend of ₹15 per share for the second quarter of FY25, which ended on September 30, 2024. The company’s decision comes on the back of a strong quarterly performance, where it reported a remarkable 153% year-on-year (YoY) increase in profit after tax (PAT), amounting to ₹1,250 crores. This substantial growth highlights Tech Mahindra’s strategic focus on growth, operational efficiency, and capital allocation.
For the quarter, Tech Mahindra reported a revenue of ₹13,313 crores, reflecting a 2.4% increase compared to the previous quarter (QoQ) and a 3.5% rise compared to the same quarter last year. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at ₹1,750 crores, showing an 11.9% QoQ growth and an impressive 63.2% YoY increase. Consolidated PAT reached ₹1,250 crores, marking a significant 46.8% QoQ and 153.1% YoY growth. The earnings per share (EPS) for the quarter were reported at ₹14.10, further reflecting the company’s strong performance.
In dollar terms, Tech Mahindra’s revenue for the quarter stood at $1,589 million, registering a 1.9% QoQ and 2.2% YoY growth. Revenue also saw a 0.7% increase QoQ and a 1.2% rise YoY in constant currency terms. The company’s EBITDA for the quarter reached $209 million, reflecting an 11.3% QoQ and 61.4% YoY growth. PAT came in at $149 million, up 46.1% QoQ and an impressive 150.7% YoY.
The company also highlighted its robust free cash flow generation, with $157 million recorded for the quarter. Tech Mahindra secured new deals with a total contract value (TCV) of $603 million, further strengthening its pipeline and growth prospects. At the end of the quarter, the company’s total headcount was 154,273, which represented an increase of 6,653 employees QoQ. The last twelve months (LTM) IT attrition rate stood at 10.6%, demonstrating effective employee retention efforts.
Additionally, the company reported that its cash and cash equivalents at the end of the quarter totaled ₹6,566 crores. Days of sales outstanding (DSO) stood at 94 days, reflecting a one-day increase QoQ but a three-day reduction YoY.
Commenting on the company’s performance, Mohit Joshi, Chief Executive Officer and Managing Director of Tech Mahindra, said, “We continue to progress on our strategic improvement efforts even as the overall IT services industry remains soft. 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.”
Rohit Anand, Chief Financial Officer of Tech Mahindra, added, “This quarter, we see consistent performance around increasing deal wins, revenue growth, cost optimization, 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 ₹15 per share, rewarding our shareholders for their continued trust and support.”
