Tech Mahindra , a leading global provider of digital transformation, consulting, and business reengineering services, has announced its Q1 financial results, revealing a mix of positive outcomes and challenges.

Financial Highlights

Tech Mahindra reported a 34% year-on-year increase in Q1 net profit to ₹1,141.00 crores, falling short of the estimated ₹1,211.00 crores. Revenue grew by 2.7% YoY to ₹13,351.00 crores, while EBIT rose 34% YoY to ₹1,477.00 crores.

Deal Wins and Business Performance

Tech Mahindra secured new deals with a Total Contract Value (TCV) of $809 million for Q1, representing a substantial YoY growth of 51%. The company's Last Twelve Months (LTM) deal wins have increased by 44%, indicating sustained business momentum across verticals and geographies.

Segment Performance

• IT Services revenue grew by 0.7% quarter-over-quarter (QoQ)
• Business Process Services (BPS) revenue increased by 2.9% QoQ

Key Operational Metrics

Notably, the IT headcount decreased by 622 QoQ to 79,987.

Analyst Views

The Q1 results have sparked divergent views among analysts:

• CLSA, Nomura, and HSBC maintain a positive outlook, citing expected growth pickup and strategic focus.
• Jefferies and Citi remain bearish, pointing to challenging margin targets and rich valuations.

Management Commentary and Outlook

The company expects growth to improve from Q2 onwards, with a target of achieving 15% margins by FY27. Despite the slower revenue growth in Q1, Tech Mahindra's management remains optimistic about future performance.

Strategic Initiatives and Partnerships

Tech Mahindra continues to expand its capabilities and partnerships:

• Launched a new managed services offering for Cisco Multicloud Defense
• Named a Red Hat Premier Partner globally
• Announced partnerships with ServiceNow, CrateDB, and Nuix to enhance various service offerings
• Collaborated with KOGO AI to develop next-gen enterprise AI solutions

As Tech Mahindra navigates through mixed financial results and divergent analyst views, it remains focused on leveraging its strong deal pipeline, expanding partnerships, and investments in emerging technologies like AI to drive growth and value creation for its stakeholders.

Tech Mahindra , a leading global provider of digital transformation, consulting, and business re-engineering services, has announced its financial results for the first quarter of fiscal year 2026, ending June 30, 2025. The company reported robust growth in profitability and deal wins, despite a challenging macroeconomic environment.

Key Financial Highlights

• Revenue: ₹13,351.00 crores, up 2.7% year-over-year (YoY)
• EBIT (Earnings Before Interest and Taxes): ₹1,477.00 crores, up 34.0% YoY
• EBIT Margin: 11.1%, up 260 basis points YoY
• Profit After Tax: ₹1,141.00 crores, up 34.0% YoY
• Diluted Earnings Per Share: ₹12.86

Strong Deal Momentum

Tech Mahindra reported impressive growth in new deal wins, with Total Contract Value (TCV) reaching $809.00 million in Q1 FY26, representing a substantial 51% increase YoY. The company's Last Twelve Months (LTM) deal wins have increased by 44%, indicating strong business momentum across verticals and geographies.

Operational Performance

• Total headcount stood at 148,517, up 897 YoY
• IT services attrition rate (LTM) was 12.6%, compared to 11.8% in the previous quarter
• Free Cash Flow for the quarter was $86.00 million

Management Commentary

Mohit Joshi, CEO and Managing Director of Tech Mahindra, stated, "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."

Rohit Anand, Chief Financial Officer, added, "We have delivered seven consecutive quarters of margin expansion - a clear reflection of the discipline and focus across our organization. Even in an uncertain environment, our Project Fortius program continues to generate meaningful results and drive operational improvements."

Strategic Initiatives and Partnerships

Tech Mahindra has been actively pursuing strategic partnerships and initiatives to enhance its capabilities, particularly in the areas of AI and cloud technologies:

• Launched a new managed services offering for Cisco Multicloud Defense
• Named a Red Hat Premier Partner globally
• Announced partnerships with ServiceNow, CrateDB, Nuix, and KOGO AI to deliver next-generation solutions in various domains

Focus on AI and Innovation

The company has made significant strides in AI adoption and innovation:

• Developed a portfolio of 200+ enterprise-grade AI agents across industry segments
• Filed a patent for VerifAI, an AI assurance tool
• Trained over 77,000 employees in AI and Gen AI

Outlook

While Tech Mahindra did not provide specific guidance for the upcoming quarters, the strong deal pipeline and focus on operational efficiency suggest a positive outlook for the company. The continued emphasis on AI, cloud technologies, and strategic partnerships positions Tech Mahindra well to capitalize on the growing demand for digital transformation services.

In conclusion, Tech Mahindra's Q1 FY26 results demonstrate the company's resilience and ability to drive growth and profitability in a challenging market environment. With a strong deal momentum and strategic focus on emerging technologies, the company appears well-positioned for sustained growth in the coming quarters.