Tech Mahindra delivered a strong third quarter performance for FY26, demonstrating robust growth across multiple business segments and achieving record deal bookings. The IT services major reported revenue of $1,610.00 million for the quarter ended December 31, 2025, representing a 2.7% year-on-year growth and 1.5% quarter-on-quarter growth on a reported basis.

Financial Performance Highlights

The company's financial metrics showed significant improvement across key parameters during Q3FY26:

On a constant currency basis, revenue increased 1.7% quarter-on-quarter and 1.3% year-on-year, marking the company's fastest quarterly growth in the last three years. The operating margin expansion of 290 basis points year-on-year to 13.1% represented the ninth consecutive quarter of margin improvement.

Record Deal Bookings and Strategic Wins

Tech Mahindra achieved unprecedented success in deal acquisitions during the quarter, with total deal wins reaching $1,096.00 million. This performance represents the highest quarterly deal bookings in five years and reflects a robust 48% year-on-year growth on a last 12-month basis.

The standout achievement was securing a strategic engagement with a leading European telecommunications company, representing one of the largest wins in company history with a total contract value exceeding $500.00 million over five years. This comprehensive modernization partnership covers both CIO and CTO domains, focusing on accelerating innovation, strengthening digital resilience, and achieving AI-led operational efficiencies.

Vertical Performance Analysis

The company demonstrated broad-based growth across key industry verticals, with several segments showing particularly strong momentum:

Communications Vertical: Delivered 4.7% year-on-year growth, showing signs of stability across the U.S. market coupled with stabilization of top client spending. The European market is expected to transition from stability into a growth phase, supported by the large deal win.

Manufacturing Segment: Continued strong trajectory with 11.7% year-on-year growth, building on momentum from previous quarters. The company saw good traction in aerospace and industrial segments in the U.S., while European growth was supported by large automotive client ramp-up during the quarter.

BFSI Performance: Declined 0.8% year-on-year, primarily due to higher than normal furloughs during the quarter and annual productivity gains passage to a large infrastructure contract. Despite the quarterly decline, BFSI demand fundamentals remain favorable with strong pipeline activity.

Retail and Logistics: Delivered robust 11.7% year-on-year growth, supported by strong traction in logistics and above-normal seasonality in the BPS business for retail operations.

Geographic and Strategic Developments

Geographically, the company showed varied performance with Europe leading growth momentum:

The company added three new $50.00 million clients year-on-year, reinforcing the strength and scalability of client relationships. Revenue from $20.00 million-plus clients continued to significantly outpace the company average, underscoring the focused approach to scaling strategic partnerships.

AI Integration and Future Positioning

Tech Mahindra continues advancing its AI capabilities, supporting clients in moving from experimentation to execution phases at scale. The company has strengthened its partnership with Google to accelerate enterprise adoption of Gemini Enterprise, leveraging multimodal models for human-centered innovation. Additionally, the company signed an MoU with the University of Texas at Dallas for AI-led innovation and will launch its first Makers Lab in the U.S., focusing on AI, data science, quantum computing, and cybersecurity innovations.

Looking ahead, management expressed confidence in achieving FY27 strategic goals, expecting to grow higher than peer average while progressing towards a 15% EBIT margin target. The strong quarterly performance reinforces the company's trajectory toward sustained momentum and long-term value creation for stakeholders.

Tech Mahindra Limited has announced the allotment of 21,712 equity shares on January 19, 2026, pursuant to the exercise of employee stock options under its established ESOP schemes. The Securities Allotment Committee of the Board of Directors approved this allotment, which was communicated to BSE Limited and National Stock Exchange of India Limited in compliance with SEBI Listing Regulations.

Share Allotment Details

The allotment was executed under two distinct employee stock option schemes operated by the company. The breakdown demonstrates the utilization of both legacy and current ESOP frameworks.

Financial and Technical Specifications

The newly allotted equity shares carry specific financial parameters and technical identifiers as mandated by regulatory requirements. Each share maintains the standard par value established by the company.

Impact on Share Capital Structure

Following this allotment, Tech Mahindra's overall equity structure has been updated to reflect the additional shares issued through the employee stock option exercise. The company's total issued share capital now stands significantly higher.

Regulatory Compliance and Share Characteristics

The allotment was executed in full compliance with Securities and Exchange Board of India regulations, specifically under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The company confirmed that the newly issued shares rank pari passu and are identical in all respects to existing equity shares. No lock-in provisions apply to these shares, and no listing fees are payable for this allotment. The shares have been issued in demat form under the existing ISIN number, ensuring seamless integration with the company's current equity structure.