India's Tech Mahindra beats quarterly revenue view on manufacturing, banking strength
Tech Mahindra CEO Mohit Joshi speaks during a press conference announcing the company's quarterly results in Bengaluru, India, April 25, 2024. REUTERS/Meghana Sastry/File Photo
BENGALURU, April 22 : Indian IT services company Tech Mahindra said it is confident of delivering growth in fiscal 2027, after its fourth-quarter revenue beat estimates on strength in the manufacturing and banking, financial services and insurance (BFSI) verticals.
The two segments drove growth, CEO Mohit Joshi said, with the BFSI push being part of the company's plan to expand its portfolio.
Revenue from manufacturing and BFSI grew 11.8 per cent and 4.7 per cent, respectively. New deal wins rose to $1.07 billion from $798 million a year earlier.
Its communications business, from which it derives a third of its revenue, grew 5.6 per cent due to stabilisation and increased spend from the company's largest U.S. client, Joshi said.
"CEO Mohit Joshi, who was previously the head of BFSI at Infosys, has been able to use his history to mine new BFSI accounts, which is a good sign. They are on track to deliver on their fiscal 2027 targets before time," said Sushovon Nayak, IT analyst at Anand Rathi.
Analysts said that the company reported a good set of numbers, but that expectations have been muted across the sector.
"On that muted expectation, they have done well. The expectation was that growth would be flat on constant currency basis, they grew 0.6 per cent," said Piyush Pandey from Yes Securities, citing client-specific issues for some of Tech Mahindra's peers.
Margin improvement trajectory remains on track, and deal wins look good, he added.
Consolidated sales for the quarter ended March 31 rose 12.6 per cent to 150.76 billion rupees ($1.61 billion), above average estimates of 147.77 billion rupees.
Net profit rose 16 per cent to 13.54 billion rupees but missed expectations.
The company's shares, which were down 6 per cent before the results, initially pared all losses after the results were announced, before closing 2.55 per cent down on broad-based weakness.
($1 = 93.8425 Indian rupees)
