Following a recovery in demand in its healthcare and manufacturing segments, Tech Mahindra, an Indian company, reported its smallest revenue fall in four consecutive quarters on Thursday, surpassing estimates.
The first quarter’s consolidated revenue was 130.05 billion rupees ($1.55 billion), a 1.2% decline. The average revenue forecast by analysts was a 1.6% decline to 129.45 billion rupees, according to LSEG statistics.
Analysts examine revenue data because it gives them insight into the demand for IT services.
Clients have reduced spending on non-essential projects due to economic uncertainty and higher interest rates, resulting in sluggish demand in India’s $254 billion IT sector.
Revenue for Tech Mahindra, India’s fifth-largest IT services firm by revenue, began falling in the last three quarters, widening from a 2% fall in the September 2023 quarter to 6.17% in March 2024.
However, the worst might be over for the sector, with larger rivals Tata Consultancy Services, Infosys and HCLTech indicating recovery in North America in the coming quarters after reporting upbeat first-quarter results.
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Despite missing projections of 8.77 billion rupees, Tech Mahindra, headquartered in Pune, reported a 23% increase in earnings for the June quarter, coming in at 8.51 billion rupees.
