Revenue and Profit Trends
Tech Mahindra’s net sales have shown a consistent upward trend over the past six years, rising from ₹34,742 crore in March 2019 to ₹52,988 crore in March 2025. This represents a significant expansion, particularly notable between March 2021 and March 2022, where sales surged from ₹37,855 crore to ₹44,646 crore, reflecting strong market demand and operational scaling. However, the fiscal year ending March 2023 saw a slight dip to ₹53,290 crore from the previous year, followed by a marginal decline in March 2024 before rebounding in March 2025.
Operating profit margins excluding other income have experienced some volatility, peaking at 18.24% in March 2019 and then moderating to 13.14% by March 2025. The margin contraction in recent years suggests increased cost pressures or competitive challenges, despite the overall growth in absolute operating profit, which stood at ₹7,819 crore in March 2025.
Profit after tax (PAT) margins have similarly fluctuated, reaching a high of 12.61% in March 2022 before declining to 8.03% in March 2025. The consolidated net profit followed a comparable pattern, rising from ₹4,297 crore in March 2019 to a peak of ₹5,566 crore in March 2022, then decreasing to ₹4,251 crore in the latest fiscal year. Earnings per share (EPS) mirrored these trends, with a peak EPS of 63.42 in March 2022 and a subsequent decline to 48.05 by March 2025.
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Cost Structure and Expenditure
The company’s expenditure profile reveals rising employee costs, which increased from ₹17,508 crore in March 2019 to ₹29,624 crore in March 2025, reflecting workforce expansion and wage inflation. Manufacturing expenses and other operating costs have also grown, though manufacturing expenses declined from ₹8,000 crore in March 2023 to ₹5,838 crore in March 2025, indicating some cost optimisation efforts. Total expenditure excluding depreciation rose in line with revenue, reaching ₹46,025 crore in March 2025.
Interest expenses have remained relatively moderate, peaking at ₹393 crore in March 2024 before falling to ₹322 crore in March 2025, signalling manageable debt servicing costs. Depreciation charges have increased steadily, consistent with asset base growth, standing at ₹1,853 crore in the latest fiscal year.
Balance Sheet and Asset Quality
Tech Mahindra’s balance sheet reflects a strong equity base, with shareholder funds rising from ₹21,813 crore in March 2020 to ₹27,362 crore in March 2025. The company has effectively reduced its long-term borrowings to zero by March 2025, down from ₹179 crore in March 2020, underscoring a focus on deleveraging. Short-term borrowings have also declined significantly to ₹471 crore in March 2025 from ₹2,250 crore in March 2020.
Total liabilities have remained stable around ₹42,637 crore in March 2025, while total assets have grown steadily to the same figure, indicating balanced financial management. The net block of fixed assets increased notably from ₹7,555 crore in March 2020 to ₹12,429 crore in March 2025, reflecting ongoing capital investments. Current assets have remained robust, with cash and bank balances rising from ₹2,835 crore in March 2021 to ₹4,542 crore in March 2025, supporting liquidity.
Cash Flow and Liquidity
Operating cash flow has shown resilience, with ₹5,785 crore generated in March 2025, though this is lower than the peak of ₹8,093 crore in March 2021. Investing activities have fluctuated, with a positive inflow of ₹20 crore in March 2025 following periods of significant outflows, indicating a cautious approach to capital expenditure. Financing activities have consistently seen outflows, reflecting debt repayments and shareholder returns. The net cash position remained relatively stable, with closing cash and cash equivalents at ₹4,318 crore in March 2025.
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Summary of Historical Performance
Over the six-year period, Tech Mahindra has demonstrated consistent revenue growth and maintained profitability despite margin pressures. The company’s strategic focus on reducing debt and strengthening its equity base has enhanced financial stability. While profit margins have contracted from earlier highs, absolute profits remain substantial, supported by efficient cost management and operational scale. The balance sheet shows a healthy asset base with improving liquidity, positioning the company well for future growth opportunities.
Investors should note the cyclical nature of margins and the importance of monitoring cost trends alongside revenue growth. The company’s ability to sustain cash flows and manage liabilities effectively will be key to maintaining its competitive position in the technology services sector.
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