Tech Mahindra Ltd gross margin has been in long-term decline. The average rate of decline per year is -8.6%.
The historical rank and industry rank for Tech Mahindra's Gross Margin % or its related term are showing as below:
BOM:532755'
s Gross Margin % Range Over the Past 10 Years
Min: 31.11 Med: 45.42 Max: 48.39
Current: 37.72
During the past 13 years, the highestGross Margin % of Tech Mahindra was 48.39%. The lowest was 31.11%. And the median was 45.42%.
BOM:532755's Gross Margin % is ranked worse than 55.52% of 2628
companies
in the Software industry
Industry Median: 41.73
vs BOM:532755: 37.72
Tech Mahindra had a gross margin of 30.12% for the quarter that ended in Mar. 2024 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Tech Mahindra was -8.60% per year.
Tech Mahindra Gross Margin % Historical Data
The historical data trend for Tech Mahindra's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Tech Mahindra's Gross Margin %
For the Information Technology Services subindustry, Tech Mahindra's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Tech Mahindra's Gross Margin % Distribution in the Software Industry
For the Software industry and Technology sector, Tech Mahindra's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Tech Mahindra's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Tech Mahindra had a gross margin of 30.12% for the quarter that ended in Mar. 2024 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Tech Mahindra Gross Margin % Related Terms
Thank you for viewing the detailed overview of Tech Mahindra's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Tech Mahindra Ltd is an IT services and consulting company in India. It offers a variety of technology solutions and services in addition to business process services. Its segments are Information Technology and Business Processing Outsourcing. The technology solutions include helping companies engage in cloud software, mobile solutions, network services, cybersecurity, and a variety of other options. The business process service is offered across various industries including telecom, financial services, retail, energy, hospitality, high-tech, agriculture, and food beverage. The company's approach includes cost reduction, process optimization, and ownership through automation and productivity improvements. Tech Mahindra generates approximately half of its revenue from the United States.
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