TechM Defies Headwinds in Q1

The June-quarter results of Tech Mahindra Ltd had some bright spots.

- Harsha Jethmalani

First-quarter Ebit margin rose sequentially for the seventh straight quarter, improving by 56 basis points (bps) to 11.1%, surpassing consensus estimates.

Also, a seasonally slow quarter for the company's mobility solutions business, higher visa costs and lower employee utilization were offset by savings from TechM's Project Fortius, favorable offshore mix and optimization of general and administrative expenses.

As part of Project Fortius, the management has retained its margin target of 15% by 2026-27. It aims to achieve it by consistently hiring fresh graduates, improving its employee utilization rate, lowering subcontracting costs, higher offshoring and competitive pricing.