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India's Tech Mahindra posts marginal first-quarter revenue miss on Americas weakness
BENGALURU, July 16 (Reuters) - Tech Mahindra, India's fifth-largest IT services company by revenue, reported marginally lower-than-expected first-quarter revenue on Wednesday, as sales in its Americas market recorded the steepest decline in nearly five years.
Consolidated sales rose 2.7% year-on-year to 133.51 billion rupees ($1.55 billion) in the June quarter, slightly below the average analyst estimate of 133.83 billion rupees, according to LSEG data.
"The market is still very, very volatile. We are seeing a continued slowdown in the auto and manufacturing portfolios," said Mohit Joshi, CEO at Tech Mahindra.
"It's a mixed picture, and I feel that it's too early to say whether the tide has turned towards significant growth, or, god forbid, towards a recession," he said in a post-earnings call.
Sagar Shetty, research analyst at StoxBox called Q1 numbers a "steady" performance due to improvement in terms of deal wins and operating margin.
"The company continued to exhibit resilience on the deal-win front, exceeding its typical quarterly guidance of $600–800 million, signaling sustained client confidence and healthy pipeline conversion," he said.
Revenue from the Americas market, which accounts for nearly half of its overall revenue, fell 5.9% compared to last year.
This marks the sharpest decline since a 6.4% drop in the December quarter of FY21 during the COVID-19 pandemic.
"I would say the single biggest hit (for Americas) has been the slowdown from a manufacturing perspective," Joshi added.
Uncertainty around U.S. tariffs have dampened IT firms' hopes of a revival in client confidence and spending in their biggest market. A survey, opens new tab in May showed two in five tech executives had deferred discretionary projects.
Four of the company's seven business verticals grew, led by a 3.8% increase in retail.
Tech Mahindra's net new bookings rose to $809 million in the quarter from $798 million in the previous quarter and $534 million in the year-ago period.
Net profit rose 34% to 11.41 billion rupees, driven by improved operating margins, but missed estimates of 11.72 billion rupees, as per data compiled by LSEG.
Last week, bellwether Tata Consultancy Services ( opens new tab also missed revenue estimates, citing delays in decision-making and project launches.
Peers Wipro ( opens new tab and LTIMindtree ( opens new tab report later this week.
($1 = 85.9340 Indian rupees)
