Tech Mahindra on Wednesday reported a 2.2% sequential decline in net profit for the first quarter of the fiscal at Rs 1,141 crore. The net profit missed Bloomberg estimates of Rs 1,195 crore.
Revenue for the quarter under consideration was down 0.2% to Rs 13,351 crore quarter-on-quarter, missing the Bloomberg estimates of Rs 13,425 crore. The firm also trailed street estimates on earnings before interest, taxation, depreciation and amortisation (Ebtida) of Rs 1,958 crore at Rs 1,835 crore, though it was up 5.2% q-o-q.
Ebitda margin expanded to 14.5% as compared to 13.7% in the previous quarter. Net profit margin shrunk to 8.5% from 8.7% in Q4FY25.
“Our performance is steadily strengthening, reflecting disciplined execution and a focused strategy. Deal wins have increased by 44% on a last twelve months (LTM) basis, supported by broad-based momentum across verticals and geographies,” Mohit Joshi, managing director and chief executive, Tech Mahindra, said.
Total contract value for the quarter stood at $809 million, up from $798 million in the preceding quarter, and $534 million in Q1FY25.
The company attributed Ebitda and profit growth to efforts towards operational efficiency undertaken during the quarter.
“We have delivered seven consecutive quarters of margin expansion — a clear reflection of the discipline and focus across our organisation. Even in an uncertain environment, our Project Fortius programme continues to generate meaningful results and drive operational improvements,” Rohit Anand, chief financial officer, Tech Mahindra, said.
The company also saw reduction in the number clients at 916 in Q1FY26 compared to 925 in the preceding quarter, and 934 in the first quarter of FY25. Most of the churn was in the $1 million and $2 million clients.
The firm said that while macroeconomic headwinds, on account of tariff tensions, may impact revenue visibility for now, it maintains its margin ambitions of 15% for FY26.
“The macro picture is still quite hazy. In certain sectors which have been impacted by tariffs and by demand activity like auto, the sentiment is still not conducive to significant discretionary investments,” Joshi said.
Some other sectors like telecom, he added, have seen a stabilisation and growth in this quarter, which the firm expects, will continue.
Joshi also called out softness in the high-tech sector on account of restructuring in the semiconductor business.
Employee metrics
During the quarter, the firm’s headcount declined by 0.14% sequentially to 148,517 at end of June 2025, as compared to 148,731 at March end. On an annual basis, the company’s headcount grew 0.61%, compared to 147,620 in the first quarter of FY25.
Tech Mahindra’s utilisation rate dipped sequentially to 85.1% as compared to 86% in the previous quarter. Attrition increased to 12.6% during the quarter as compared to 11.8% in Q4FY25.
The firm did not give any guidance on the hiring for the year. Joshi, however, stressed that the company has an advantage in terms of the average experience of its workforce, which is significantly higher than its peers.
Industry-wise performance
Communications continued to be the largest vertical by revenue with a contribution of 33.8%, followed by manufacturing at 17.5%. BFSI accounted for 16.4%, while hi-tech and media accounted for 13.3% of the revenue.
While communications (2.8%), manufacturing (4%), technology, media and entertainment (1.3%) and healthcare and life sciences (0.1%) showed sequential growth, banking and financial services (BFSI) (-0.6%) and retail, logistics, and transport (-1%) dipped q-o-q.
Revenue by geography
The US accounted for 49.2% of the firm’s revenues, while Europe accounted for 26%. The rest of the world contributed 24.8%.
The US showed a growth of 2.6% sequentially, and a decline of 5.9% annually. Europe grew 3.6% sequentially and 11.7% annually, and the rest of the world declined 4.5% q-o-q, but grew 2.9% y-o-y.