Tech Mahindra Q4 Results: Revenue at ₹12,871 Cr; down 6.2% YoY, PAT Down 40.9% YoY

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Synopsis:

Tech Mahindra Q4 results were released on 25 April 2024 portraying a somewhat mixed picture of financial results as the Company witnessed a Revenue drop at ₹12,871 Crore, a decrease of 6.2% YoY. Nonetheless, the Company’s EBITDA was up 22.8% QoQ, but decreased on a YoY basis. Consolidated PAT was up on a QoQ basis and reached ₹661 Crores, rising 29.5% for the quarter. On a yearly basis, the result may be muted, but for Q4 FY2023-24, the Company has posted a quarterly result that is comprised of better Cash Generation and Deal Wins that hope to improve the Revenue of the Company in the fiscal year to come.

Introduction

A key player in the arena of global digital solutions and technology consulting to enterprises, Tech Mahindra announced its Q4 FY2023-24 and FY2024 results with less of an impact than was expected. For Q4, Revenue stood at ₹12,871 down by 1.8% QoQ, and down by 6.2% YoY. EBITDA for the quarter was up by 22.8% QoQ, but witnessed a fall on a YoY basis. While one of the optimistic metrics for the quarter was the Consolidated PAT (Profit After Tax) reaching ₹661 Crore, a rise of 29.5%, but again, decreasing on a YoY basis by a whopping 40.9%. The Company’s total headcount was another downer in the quarter, decreasing by 795 QoQ. The Company was faced by its fair share of challenges in FY2023-24, considering the overall atmosphere of the IT services sector. 

Explore: Tech Mahindra Share Price

5 Key Financial Highlights

Tech Mahindra Q4 FY2023-24 results may be considered interesting in light of the digital push that India is aiming for. Although metrics may tend towards the lower end of the profitability spectrum, the Company has seen some highs in the last fiscal year. Here are the key financial highlights of Tech Mahindra results for its fourth quarter of FY2023-24:

  • The Company’s Revenue stood at ₹12, 871 Crore, a decrease of 1.8% QoQ, and a fall of 6.2 YoY

  • EBITDA was at ₹1,408 Crore, a rise of 22% QoQ, but down by 30.3% YoY.

  • Consolidated PAT was at ₹661 Crore, a rise of 29.5% QoQ, but a fall of 40.9% on a YoY basis

  • The EPS (Earnings per Share) was at ₹7.45

  • Cash and Cash Equivalents were at ₹7,912 Crore as of 31 March 2024 (the end of Q4). 

Additional Read: 129 Indian Companies to Release Q4 Results

Tech Mahindra Q4 Results - Strategic Business and Deal Wins Enhance Performance

While at first glance, the major digital services provider’s results seem subdued for Q4 and FY2023-24, its Free Cash Flow stands at $129 mn (USD) in Q4 and at $676 mn (USD) for the full previous fiscal year (FY2023-24). As with all large corporations, Tech Mahindra may not have had a great year in terms of performance and financial metrics, but the Company is taking strides towards improving its position in the digital domain, both globally and domestically. While its U.S. market business is on the downside for the previous year, its European business showed some light at the end of the tunnel (a QoQ rise of 0.2% in Revenue). 

With more digital adoption and key deal wins in Q4, Tech Mahindra is quite optimistic for a boost in its Revenues. Among its deal wins that the Company sees as prospective enhancements to its operations are collaborations with Swedish and Australian Telecommunication firms. Additionally, Tech Mahindra has also signed partnership deals with key players like Ooredoo Hutchison, Etihad Etisalat (Mobily), and Pegatron. The Company’s total deal wins amounted to $500 mn as of Q4. 

Additional Read: Quarterly Results

Major Financial Metrics - Consolidated Q4 (FY2023-24) Financial Results of Tech Mahindra (in ₹ Crore)

Metrics

Q4 FY24

Q3 FY24

Q4 FY23

QoQ%

YoY%

Revenue from Operations

12,871

13,101

13,718

-1.8%

-6.2%

Gross Profit

3,477

3,136

3,969

10.9%

-12.4%

EBITDA

1,408

1,146

2,020

22.8%

-30.3%

EBITDA Margin

10.9%

8.8%

14.7%

2.2%

-3.8%

Depreciation and Amortisation 

461

443

490

4.1%

-5.9%

EBIT

946

703

1,530

34.6%

-38.2%

EBIT %

7.4%

5.4%

11.2%

2.0%

-3.8%

Other Income

373

87

305

326.9%

22.3%

Profit Before Tax

959

679

1,525

41.3%

-37.1%

Profit After Tax

664

524

1,125

26.8%

-41.0%

Net Profit After Tax (After Minority Interest)

661

510

1,118

29.5%

-40.9%

Net PAT%

5.1%

3.9%

8.1%

1.2%

-3.0%

EPS - Basic

7.48

5.77

12.67

29.5%

-41.0%

EPS - Diluted

7.45

5.76

12.62

29.4%

-41.0%

(While converting from ₹ Mn to ₹ Cr, some figures have been rounded off)

Additional Read: Annual Results

The Tech Mahindra Story Continues into FY25

After Tech Mahindra’s results, the Company is far from shy of forging ahead into FY2024-25 with an optimistic view of its prospects. While it embraces Generative AI in its push towards digital autonomy in its businesses, it has gained tremendous recognition in this sphere from the technology industry. The Company boasts more than 100 Qualified Gen Al Opportunities,  above 60 pre-built Gen Al capabilities covering 6 forms of content, and more than 30 Active Gen AI Client Engagements with the latest LLMs. The key differentiator of the Company is its distinctive ability to facilitate its clients at a transformative scale at a speed that is unparalleled in the industry. This gives the Company an edge over competitors as it propels itself into the next fiscal year with extensive digital adoption. 

Conclusion

Tech Mahindra Q4 results may not be up to speed with the industry and its standards of success, but the Company has managed to hold its ground in its sector. With healthy cash generation, improvements in operating margins and deal wins in Q4 FY2023-24, the Company sees a positive future in the next fiscal year. Aiming for steady earnings growth, Tech Mahindra continues to concentrate on operational excellence and cost savings to tide over the winds of change and come out winning in its industry. 

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Source: Tech Mahindra Financial Results on BSE

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Frequently Asked Questions

What was the Tech Mahindra Q4 PAT?

Answer Field

The PAT for Tech Mahindra in Q4 was at ₹661 Crore.

What are some of the deal wins that Tech Mahindra has achieved in Q4 FY2023-24?

Answer Field

Tech Mahindra’s Q4 result reveals that the Company has had key deal wins with Ooredoo Hutchison, Etihad Etisalat (Mobily), and Pegatron.

Has Tech Mahindra declared any dividend in Q4 FY2023-24?

Answer Field

Yes, the Company has declared a final dividend of ₹28 per equity share for the fiscal year 2023-24.

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