Tech Mahindra , a leading provider of digital transformation, consulting, and business re-engineering services and solutions, has reported its financial results for the first quarter of fiscal year 2026, showcasing resilience in a challenging macroeconomic environment.

Key Financial Highlights

• Revenue stood at $1,564.00 million, reflecting a 0.40% year-on-year growth and a 1.00% decline on a constant currency basis.
• EBIT margin improved to 11.10%, up from 10.50% in the previous quarter, marking the seventh consecutive quarter of margin expansion.
• Profit after tax (PAT) increased by 30.00% to $133.00 million, with PAT margin expanding by 200 basis points to 8.50%.
• Total Contract Value (TCV) for the quarter was $809.00 million, representing a 44.00% year-on-year increase on an LTM basis.
• Free cash flow was $86.00 million, impacted by seasonal factors and timing-related collection delays.

Vertical Performance

Geographical Performance

Client Metrics and Deal Wins

• Added 2 clients in the $50.00 million bucket.
• Onboarded 15 new must-have accounts.

Strategic Focus and Future Outlook

Tech Mahindra continues to make progress toward its stated FY27 margin targets and expects FY26 performance to be better than FY25. The company is focusing on:

1. Deepening relationships with top accounts, which are showing faster than company average growth.
2. Adding new must-have accounts to drive future growth.
3. Winning profitable large deals to boost revenue momentum.

Despite the challenging environment, Tech Mahindra's focus on margin improvement, strategic client acquisitions, and innovative solutions positions it well for future growth in the dynamic IT services landscape.

Tech Mahindra , a leading Indian IT services company, saw its stock price fall 2.7% following the release of its Q1 financial results, which fell short of market expectations. The company's performance has sparked a debate among analysts regarding its future prospects, with some expressing concerns about the stock's valuation.

Q1 Results Disappoint Investors

The IT giant's first-quarter results for the fiscal year failed to meet analyst projections, leading to a sell-off in the stock. While specific financial figures were not disclosed, the market reaction suggests that the company's performance was below par compared to industry peers and analyst estimates.

Analyst Perspectives

The disappointing Q1 results have led to divided opinions among market analysts:

• JP Morgan has taken a cautious stance, rating Tech Mahindra's stock as 'neutral' with a target price of ₹1,550.00.
• Other analysts have expressed concerns about the company's rich valuations, suggesting that the current stock price may not fully reflect the company's near-term growth prospects.

Management Outlook

Despite the market's tepid response, Tech Mahindra's management remains optimistic about the company's future:

• They have projected revenue growth for FY27 to be above industry peers, indicating confidence in the company's long-term prospects.
• Management expects a pickup in performance from the next quarter, suggesting that the current slowdown may be temporary.

Investor Considerations

Investors and market watchers are now faced with weighing several factors:

1. The company's ability to meet its projected growth targets
2. The potential for improvement in the coming quarters
3. The current valuation of the stock in light of recent performance

Recent Corporate Developments

In other company news, Tech Mahindra recently held its 38th Annual General Meeting (AGM) on July 17, 2025. The meeting, conducted through video conferencing, saw the passage of all eight resolutions proposed by the company. These included:

• Adoption of financial statements
• Declaration of dividends
• Re-appointment of Mr. Mohit Joshi as Director
• Approval of a new Performance Share Plan for 2025

The successful passage of these resolutions, particularly those related to future compensation plans, suggests that despite short-term challenges, the company is planning for long-term growth and employee retention.

As Tech Mahindra navigates through this challenging period, investors will be closely monitoring the company's performance in the coming quarters to see if it can deliver on its promise of improved results and justify its current market valuation.