Tech Mahindra posted 6% sequential dip in net profit for the third quarter of the fiscal at Rs 1,122 crore (Q2: Rs 1,195crore), weighed down by the impact of the new labour code implementation, the Mumbai-based tech major announced on Wednesday.
The net profit missed Bloomberg estimates of Rs 1,369 crore. The impact of the new labour codes declared by TechM amounted to Rs 272.4 crore.
Revenue for the quarter under consideration was up 2.84% sequentially at Rs 14,393 crore (Q2: Rs 13,995 crore), beating Bloomberg estimates of Rs 14,170 crore.
The firm also beat street estimates on earnings before interest, taxation, depreciation and amortisation (EBITDA) of Rs 2,258 crore at Rs 2,365.6 crore, and EBITDA was up 9.11% quarter on quarter.
EBIT for the quarter for up 11.3 sequentially, and came in at Rs 1,892 crore.
“Our deal wins on an LTM basis are the highest we have achieved in the past five years, reflecting an improved deal-win run-rate over the past several quarters. The momentum is a testament to our sustained investments in sales, solution-oriented go-to-market approach and the growing relevance of our AI-led offerings in addressing client needs.
Together, these efforts are laying a strong foundation for long-term value creation,” Mohit Joshi, managing director and chief executive, Tech Mahindra, said.
New deal wins TCV for the quarter stood at $1.1 billion, up from $816 million in the preceding quarter, and $745 million in Q3FY25.
“This quarter reflects a well-rounded financial performance, marked by ninth consecutive quarter of margin expansion and continued strength in cash generation. A sustained focus on working capital discipline has led to improved cash flows and a meaningful improvement in DSO, driven by consistent execution.
We remain on track in our progress toward our FY27 goals,” Rohit Anand, chief financial officer, Tech Mahindra said.
The company also saw increase in the number clients at 928 in Q3FY26 as compared to 909 in Q2FY26, and 921 in the third quarter of FY25. TechM added 2 $50 million clients and 5 $10 million clients over last quarter.
Employee metrics
During the quarter, the firm’s headcount reduced 2.03% sequentially to reach 149, 616 as compared to 152,714 at end of September 2025, driven by reduction in all three buckets – BPS, IT and sales workforce. On an annual basis, the company headcount reduced 0.6% compared to 150,488 in the third quarter of FY25, led mainly by decrease in IT staffing.
Tech Mahindra’s utilisation rate grew sequentially to 86.6% versus 84.4% in the previous quarter while attrition reduced quarter on quarter at 12.3% (Q2FY26: 12.8%).
The firm did not give any guidance on the hiring for the year. Joshi however asserted that TechM’s dependence on US H1-B visas is very limited, and as such the impact of changing visa policies will have a limited impact on the firm.
Industry-wise performance
Communications continued to be the largest vertical by revenue with a contribution of 33.1%, followed by manufacturing at 18.3%. BFSI accounted for 15.5% while technology and media accounted for 13.2% of the revenue.
However, BFSI (-2%) was the only vertical that showed sequential decline at -6% growth. Retail and logistics grew maximum – 4% sequentially, followed by communication (2.8%) and technology and media (3%).
Revenue by geography
The Americas accounted for 50.6% of TechM’s revenues while Europe accounted for 25.6%. The rest of the world contributed 23.9%.
The Americas showed a growth of 3.1% sequentially and of 2.1% annually. Europe grew 2.2% sequentially 11.2% annually, while the rest of the world declined 2.3% quarter on quarter, 4% year-on-year.