Tech Mahindra CEO Optimistic About 2025 Prospects
Despite a subdued third quarter, Tech Mahindra’s CEO Mohit Joshi is confident that 2025 will be a better year for the company. The Indian software services provider’s earnings missed expectations due to weak demand in its core telecom segment.
Challenging Times for Indian IT Sector
The $245-billion Indian IT sector has been facing headwinds, with clients cutting back on discretionary spending amid economic uncertainties and higher borrowing costs. This has led to a decline in revenue for many companies in the sector.
Macro-Economic Factors Key to Recovery
According to Joshi, the sector’s revenue is heavily dependent on macro-economic factors and overall enterprise expenditures. While these factors have not changed significantly in the last six months, Joshi believes that 2025 will be an improvement over 2024.
Revenue Growth and Order Bookings
Tech Mahindra’s revenue rose 1.4% to 132.86 billion rupees ($1.53 billion) in the October-December period, while net profit surged 93% to 9.83 billion rupees. The company’s order bookings also rose to $745 million, a trend Joshi termed as sustainable.
Stabilizing Demand and Improved Deal Momentum
Research analyst Sagar Shetty notes that improved deal ramp-ups during the quarter enabled the company to offset seasonal furloughs. With an improved deal win momentum and margin-accretive measures, Tech Mahindra is well-poised to achieve its turnaround targets.
Segment-Wise Performance
Revenue from Tech Mahindra’s banking, financial services, and insurance segment grew 8.3% in the quarter, while telecom declined 5.6%. Joshi highlighted growth in BFSI and other segments such as media and lifesciences as “healthy” and identified “pockets of demand” in North America, Europe, and Asia Pacific-Japan.
A Promising Outlook
While the company faces challenges, Joshi’s optimism about 2025 prospects is rooted in the stabilizing demand and improved deal momentum. As the company continues to focus on its turnaround targets, investors will be watching its progress closely.
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