Tech Mahindra Q2 preview: PAT may fall but revenue may inch up YoY; progress on deal ramp-ups eyed

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26 Aug, 2025 12:21

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IT player Tech Mahindra will announce its September quarter earnings on October 23 wherein, apart from the numbers, progress on deal ramp-ups and outlook on telecom vertical will also be in the focus.

The company is expected to post a fall in EBITDA margin and profit after tax (PAT) on a yearly basis.

As per the estimates of brokerage firm Motilal Oswal Financial Services, Tech Mahindra's revenue may inch up by 1.7 percent year-on-year (YoY) but PAT may fall 21.8 percent YoY.

While EBITDA margin may improve quarter-on-quarter (QoQ), on a yearly basis, it may be down.

"Q2 FY21 EBITDA margin may come at 15.5 percent, up from 14.3 percent in Q1 FY21 but down from 16.5 percent in Q2 FY20," Motilal Oswal said.

On similar lines, Kotak Institutional Equities expects a 2 percent YoY rise in Tech Mahindra's revenue but adjusted PAT may see a 14.6 percent YoY fall. EBITDA margin may slip 45 bps YoY.

"We forecast constant currency (CC) revenue growth of 1.8 percent QoQ. Revenue growth will be led by—(1) sharp growth in BPO business led by easing of supply-side constraints, (2) stabilisation in manufacturing
and growth in financial services and healthcare, (3) BPO-led growth in communications practice," Kotak said.

Kotak expects net-new TCV to range from $400-500 million. The normalisation of deal wins is largely on the back of decisions on mid-sized deals, Kotak said.

As per the brokerage, capital allocation policy will be an area of focus along with measures taken by the company to improve operating margins and sustainable operating band.

Centrum Institutional Research expects Tech Mahindra to deliver constant currency revenue growth of 1.6 percent QoQ.

"Cross-currency would be tailwind of 140bps for the quarter. Hence, reported USD revenues would grow by 3 percent QoQ. We expect EBIT margins for Q2 FY21 at 11.4 percent, up 135bps QoQ," Centrum said.

While Tech Mahindra has shown strong margin performance in Q1 FY21, Centrum believes the company may show this continued margin expansion in Q2 FY21 as well.

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