**Tech Mahindra Reports Lower-Than-Expected Revenue in Q1 2025**
Tech Mahindra Ltd began the fiscal year with disappointing revenue figures, falling short of analyst expectations due to sluggish business performance outside its primary markets. The Pune-based IT outsourcing firm reported revenues of $1.56 billion for the April-June 2025 quarter, reflecting a modest sequential increase of 0.97%. Analysts had anticipated a higher figure, with a Bloomberg survey of 35 experts projecting revenues of $1.57 billion.
A significant factor contributing to the revenue slowdown was the decline in business from regions outside the Americas and Europe, which account for about 25% of the company’s total revenue. This segment saw a sequential drop of 4.4%, totaling $388 million.
Despite the overall revenue challenges, Tech Mahindra’s communication sector, its largest vertical, added $15 million to the revenue, highlighting its importance to the company’s financial performance.
During a post-earnings press conference, CEO Mohit Joshi expressed caution regarding the economic outlook. He noted that the macroeconomic environment remains uncertain, particularly in sectors affected by tariffs and fluctuating demand, such as the automotive industry. Joshi remarked, “The sentiment is still not conducive to significant discretionary investments.”
This cautious tone echoed that of larger competitor Tata Consultancy Services Ltd, which also reported delays in decision-making and project execution due to economic uncertainties. In contrast, HCL Technologies Ltd, another major player in the IT services sector, indicated that macroeconomic conditions had stabilized, contrary to initial fears at the start of the quarter.
While TCS reported a revenue decline of 0.59% to $7.42 billion, HCL Technologies experienced a 1.34% increase, ending the quarter with $3.55 billion. HCL has projected a revenue growth of 3-5% in constant currency for the full year.
Tech Mahindra does not provide specific quarterly or annual guidance, but management indicated that it is premature to predict whether the company will experience significant growth or face a recession. Joshi stated, “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.” However, he expressed optimism that deal wins would begin to contribute to revenue growth in the latter half of the year.
The company reported new deal wins totaling $809 million, a 44% increase year-over-year. Nearly half of Tech Mahindra’s business comes from the Americas, which was its strongest market in the last quarter.
A notable concern for the company was its net profit, which reflects the ongoing challenges in the current economic landscape.
**FAQ**
**What were Tech Mahindra’s revenue figures for Q1 2025?**
Tech Mahindra reported revenues of $1.56 billion for the April-June 2025 quarter, which was lower than analyst expectations.
