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Tech Mahindra, a leading IT services company, announced robust financial results for its third quarter (Q3) ended December 31, showcasing a significant surge in its deal pipeline and overall performance. The company's total contract value (TCV) for the quarter reached a remarkable $745 million, representing a substantial year-on-year (YoY) increase of nearly 95.4 percent. This impressive growth was attributed to a broad spectrum of successful deal acquisitions across diverse verticals and geographical locations, indicating a strong market position and expanding client base. The substantial increase from the previous quarter's $603 million underscores a clear upward trajectory in the company's performance, demonstrating a sustained commitment to securing lucrative contracts and expanding its market share.
Mohit Joshi, CEO and Managing Director of Tech Mahindra, played a crucial role in interpreting these results and offering insights into the company's strategic direction. He emphasized that the substantial deal wins are not a fleeting occurrence but rather a reflection of a sustainable, long-term trend. This assertion highlights the confidence that clients have in Tech Mahindra's capabilities and its ability to deliver innovative technological solutions. Joshi pointed out that the company's Q3 revenue figures were slightly impacted by currency fluctuations; however, adjusting for these headwinds revealed strong revenue growth across key sectors such as communications, BFSI (Banking, Financial Services, and Insurance), life sciences, and healthcare. He further highlighted a diversified geographical presence, with considerable demand across prioritized markets including North America, Europe, and the Asia-Pacific Japan (APJ) region. This geographical diversification mitigates risks and provides a stable foundation for future growth.
Joshi's commentary extended beyond the immediate financial results, offering a strategic perspective on Tech Mahindra's journey. He emphasized the long-term nature of the company's growth strategy, viewing the current success as merely the first year of a multi-year plan. This perspective indicates a focus on sustainable growth rather than short-term gains. Notably, Joshi stressed that the company's strategy is not focused solely on securing large deals, but rather on prioritizing quality and client satisfaction. He emphasized the consistent progress made quarter after quarter, highlighting a focus on building lasting partnerships with clients rather than pursuing short-term, potentially less-sustainable gains. This approach emphasizes quality over quantity, suggesting a strategy built on establishing strong, long-term client relationships that are mutually beneficial.
Further supporting Tech Mahindra's strong performance, the company reported adding over 40 new clients in its ‘must-have’ accounts category. Of these, 12 were added in the December quarter alone. This significant increase in client acquisition demonstrates a considerable ability to successfully penetrate new markets and onboard new clients effectively. Furthermore, the company highlighted that nearly two dozen of these new accounts generate over a million dollars in annual revenue, demonstrating the acquisition of substantial, high-value clients. The company's ability to secure six large deals from these newly acquired accounts in fiscal year 2025 further reinforces its success in not only acquiring new clients but also in establishing valuable and profitable relationships with them. This expansion of the client base demonstrates the company's commitment to growth and market penetration.
While the company reported a strong YoY increase in net profit (92.6 percent, reaching Rs 983 crore), there was a sequential decline of 21.36 percent. This decline, however, was attributed to a higher base in the previous quarter, resulting from a one-time special income generated from the sale of assets. The previous quarter's net profit of Rs 1,250 crore included a significant contribution of Rs 450.2 crore from the sale of a property. Therefore, the sequential decline should be viewed within the context of this exceptional, non-recurring income. Revenue for the quarter increased by 1.4 percent YoY, reaching Rs 13,285 crore, while exhibiting a marginal sequential decline of 0.21 percent. These figures, when viewed in conjunction with the robust deal wins and client acquisitions, provide a comprehensive picture of the company's performance and strategic progress.
In conclusion, Tech Mahindra's Q3 results demonstrate a strong financial performance driven by significant deal wins and expansion into new markets. The company's focus on sustainable growth, quality partnerships, and client satisfaction, as highlighted by CEO Mohit Joshi, lays a solid foundation for continued success. The impressive growth in TCV, the addition of numerous high-value clients, and the positive outlook for the coming years all point towards a trajectory of sustained growth and market leadership for Tech Mahindra within the dynamic IT services sector. The company’s strategic approach, prioritizing long-term value creation over short-term gains, offers further assurance of its ability to navigate the competitive landscape and maintain its strong position in the market.