Tech Mahindra profit slumps 41 per cent to Rs661cr in fourth quarter

• Full-year profit nosedives 51.2 per cent to Rs2,358cr while revenues fall 2.4 per cent to Rs51,996cr.
• Company hopes to come back to growth in the second half of FY25 and recommends a final dividend of Rs28 per equity share.

India’s IT services company Tech Mahindra reported a 41 per cent year-on-year fall in its fourth-quarter consolidated net profit to Rs661 crore amid weakness in the communications vertical.

For the whole year, Tech Mahindra’s net profit fell 51.2 per cent in FY24 to Rs2,358 crore and revenue 2.4 per cent on year at Rs51,996 crore.

Tech Mahindra’s highest revenue comes from communications, media, and entertainment, which fell 16.5 per cent on year in the last quarter of financial year 2023-24.

 “As we step into FY25, we look forward to improvement in clients spending, which fuels our optimism for a better revenue performance ahead. Our unique ability to enable customers with transformative scale at unparalleled speed, differentiates us from competitors,” Mohit Joshi, Chief Executive Officer and Managing Director, Tech Mahindra, said.

The CEO outlined an ambitious three-year roadmap to accelerate revenue growth and lift margins.

For FY25, the company is calling it the turnaround phase.

There will be front-end integration, Investment in accounts, key markets, and service lines. In FY26, The stabilisation phase, the company aims to continue above normal investments and bring about full integration of portfolio companies. It will also focus on further progress on cost savings.

In FY27, it plans on reaping returns through improved long-term structural mix and continuous improvement in pyramid.

Tech Mahindra CEO said the company hopes to come back to growth in the second half of FY25. The company plans to onboard around 6,000 freshers this year.

“We are living in a new era of scale and speed. The way large enterprises approach technology has fundamentally changed.”

Also, the board of Tech Mahindra recommended a final dividend of Rs28 per equity share. “Recommended Final Dividend of Rs28 per equity share of the face value of Rs5 each (560 per cent) for the financial year ended March 31, 2024, subject to the Members’ approval at the forthcoming Annual General Meeting of the company,” Tech Mahindra said in an exchange filing.