Tech Mahindra reported a 20.5% sequential growth in net profit to Rs 1,353.8 crore and a 4.7% growth in revenue to Rs 15,076.1 crore for the March quarter, driven by a ramp-up in revenue and favourable currency exchange.
The company’s EBIT margin was up 70 basis points quarter-on-quarter to 13.8%, and EBIT was up sequentially 10.2% to Rs 2,084 crore. Tech Mahindra’s revenues beat Bloomberg’s estimates of Rs 14,784, but fell short of profit estimates of Rs 1,511 crore and EBIT of Rs 2,491 crore. In dollar terms, revenue rose by 0.9% q-o-q to $1,625 million.
FY26 was important for deals for the company, and it included two mega deals, as companies were spending to embed AI, Tech Mahindra CEO and managing director Mohit Joshi said. The company reported strong deal momentum with $ one billion deals for consecutive quarters.
Deals above $ 50 million
Deals above $ 50 million increased by four to 29 companies, while those above $ 20 million rose by seven to 66. The company said this was a reflection of the improved client spending and conversion. The company said it secured multiple large, multi-year engagements across telecom, banking, manufacturing and energy verticals, including AI-led transformation and managed services deals.
Growth was led by the manufacturing segment, both aerospace and automotive, in the US and Europe. BFSI follows this with retail, logistics and transport having the best year. However, the hitech declined by 2.7%, and the healthcare segment was flattish due to muted spending and regulatory challenges, respectively, Joshi said.
Growth in revenues and deal wins
Growth in revenues and deal wins, the company was confident of meeting its 15% margin target for FY27, as per the three-year plan rolled out in 2024, Joshi said. The company had multiple levers as it grows faster with a mix of services, improved revenues and a focus on larger clients, Joshi said. “AI-led transformation will unlock spending,” Joshi said.
They would grow faster than the average growth of the large four peer companies, he added. The company exited FY26 with a margin of 12.6%.
On hiring in FY27, the company said it will not be as much as they had done in the first year of their three-year plan, but it would be better than the hiring in the last year. There will be some fresh hiring in FY27.
The company announced a final dividend of Rs 36 per equity share for FY26, taking the total dividend for the year to Rs 51 per share.