Tech Mahindra Beats Other IT Giants, Reports 93% YoY Profit

Tech Mahindra reported a 92.6% year-on-year (YoY) increase in net profit for the third quarter ended December 31, 2024, reaching $115 million, with a total revenue of revenue for the quarter rising to $1.56 billion.

The growth came despite the IT sector’s seasonal challenges, including holidays and furloughs, which typically impact performance. Tech Mahindra secured new deal wins with a total contract value (TCV) of $745 million during the third quarter.

Mohit Joshi, CEO and MD of Tech Mahindra, noted, “We see an improved rate of deal wins in our key verticals and prioritised markets. This coupled with consistent expansion in operating margins, despite cross-currency headwinds during the quarter, reaffirms that we are on track to achieve our long-term goals.”

“We were the first to build sovereign large language models, not just in India, but also in Indonesia,” said Joshi. Tech Mahindra has launched Centers of Excellence (CoE) powered by NVIDIA platforms to drive innovation in sovereign LLM frameworks, agentic AI, and physical AI, including the announcement of Project Indus 2.0 at the NVIDIA AI Summit. 

Joshi said that the team has taken this even further to create tiny language models for clients to solve specific problems and also how these models can be deployed on chips. “We are working with chip manufacturers to build out the models that can easily be deployed on different architectures.”

He added that AI is getting infused with all of their offerings including working for clients in the life sciences, aerospace, and defense sector. “I feel very optimistic about the depth of the solutions that we’re creating,” he said, that they are heavily investing in R&D.

Tech Mahindra reported a total headcount of 150,488 employees at the end of the third quarter, reflecting a sequential decline of 3,785 employees but a year-on-year increase of 4,238. The company’s LTM IT attrition rate stood at 11.2%. 

For this year, Tech Mahindra plans to hire 6,000 freshers. 

This year, the company introduced TechM agentX, a suite of GenAI-powered solutions aimed at boosting global enterprise efficiency through intelligent automation. These solutions enable businesses to automate complex IT, data, and operational tasks, enhancing productivity by up to 70%.

The CoE also uses the NVIDIA Omniverse platform to develop connected industrial AI digital twins and physical AI applications across various sectors and industries. The CoEs are located within TechM’s Makers Labs at Pune and Hyderabad.

CFO Rohit Anand highlighted the company’s operational efficiencies, stating, “We delivered growth in EBIT margin and operating PAT, both on a sequential and year-on-year basis, resulting from our targeted actions under Project Fortius, along with steady increase in new deal wins, across prioritised verticals and markets. Our continued focus on optimising working capital management has resulted in generation of robust free cashflow.”

Anand added that the company is going to continue to make investments for its long term sustainable growth. “Some of the areas of investment include GenAI capabilities in terms of training, tools, partnerships,” Anand said.

In December, Tech Mahindra announced its integration with ServiceNow to launch the One E2E Platform, an end-to-end enterprise service management solution. The platform aims to enhance operational efficiency and competitiveness by embedding its generative AI offerings into critical business processes.

Infosys also posted strong financial results for Q3 FY25, with an 11.9% increase YoY net profit to $804 million, highlighting the importance of generative AI. “In generative AI, we have built four small language models for banking, IT operations, cyber security and broadly for enterprises in generative AI,” CEO and MD Salil Parekh said. He added that the company is developing over 100 new agents for its clients, many of which are already in use. 

Similarly, TCS reported that its clients are actively investing in generative AI and agentic AI while building robust data foundations and the company is working on drug discovery and AI agents for its clients. The company reported a consolidated net profit of $1.46 billion for Q3 FY25, marking a 12% increase YoY.