Tech Mahindra has outlined its strategic approach for achieving revenue growth leadership by FY27, with company executives confirming that growth will be primarily organic with no major acquisitions planned. The company continues to build on its strongest quarterly deal performance in five years while maintaining confidence about outperforming industry peers through internal capabilities and operational excellence.

Organic Growth Strategy Takes Center Stage

Tech Mahindra executives have clearly stated that the company's path to FY27 growth leadership will be through organic expansion rather than major acquisitions. This strategic decision reflects the company's confidence in its internal capabilities and existing business momentum, building on the foundation of record deal wins and strong global pipeline strength.

Record-Breaking Deal Performance Supports Organic Approach

The company's decision to focus on organic growth is supported by its highest deal wins in five years during the current quarter. Company executives have highlighted the strength of their global deal pipeline, positioning this momentum as sufficient foundation for anticipated superior revenue growth compared to industry peers by FY27 without requiring major external acquisitions.

Mixed Sector Performance Reinforces Internal Focus

Tech Mahindra's organic growth strategy comes amid mixed performance across different sectors. The company reports strong growth in aerospace and industrial areas of manufacturing within the US market, while facing continued challenges in technology, media, and entertainment sectors due to cost pressures. This varied performance landscape supports the company's decision to focus on optimizing existing operations rather than pursuing major acquisitions.

Strategic Positioning for Organic Leadership

The combination of record deal wins, strong global pipeline, and executive commitment to organic growth demonstrates Tech Mahindra's confidence in achieving FY27 revenue leadership through internal capabilities. By ruling out major acquisitions, the company is positioning itself to maximize returns from existing strengths in aerospace and industrial manufacturing while addressing weaknesses in other sectors through operational improvements and strategic focus.

Tech Mahindra delivered mixed financial performance in Q3, with revenue and margins exceeding analyst expectations while profit fell short of estimates due to a significant one-time charge. The IT services company reported consolidated revenue of ₹14,393 crore, surpassing poll estimates of ₹14,209 crore, while net profit of ₹1,122 crore missed estimates of ₹1,385 crore. The quarter was notably impacted by a one-time charge of ₹2.72 billion due to new labor laws in India, affecting overall profitability despite strong operational performance.

Financial Performance Overview

The company's Q3 results showcase contrasting performance across revenue and profitability metrics, with the one-time regulatory charge creating additional headwinds. The comprehensive financial performance demonstrates strong operational execution despite profit pressures:

On a year-on-year basis, net profit declined 6.00% from ₹1,194.50 crore, while revenue grew 2.80% from ₹13,995 crore. EBIT increased 11.30% to ₹1,891.60 crore from ₹1,699 crore, with margins improving to 13.10% from 12.10%.

Strong Deal Momentum and Operational Metrics

Tech Mahindra demonstrated exceptional performance in new business acquisition during the quarter, with deal wins reaching the highest levels in five years. Key operational highlights include:

The company reported days of sales outstanding at 90 days and cash equivalents of ₹7,666 crore at quarter-end, reflecting strong working capital management.

Management Commentary and Strategic Outlook

Mohit Joshi, CEO and Managing Director, highlighted the company's improved deal-win trajectory, stating that deal wins on a last twelve months basis represent the highest achieved in five years. He attributed this momentum to sustained investments in sales, solution-oriented go-to-market approach, and growing relevance of AI-led offerings in addressing client needs.

Rohit Anand, Chief Financial Officer, emphasized the well-rounded financial performance, noting the ninth consecutive quarter of margin expansion and continued strength in cash generation. He confirmed the company remains on track toward its fiscal 2027 goals, with sustained focus on working capital discipline leading to improved cash flows despite the one-time regulatory impact.

Regulatory Impact and Business Positioning

The ₹2.72 billion one-time charge related to new labor laws in India represents a significant regulatory adjustment that impacted Q3 profitability. However, the company's ability to exceed revenue and margin estimates while securing substantial new contracts indicates effective client relationship management and competitive positioning. Management maintains confidence in achieving FY27 targets, emphasizing that the regulatory charge is a one-time event that does not affect the underlying business trajectory or long-term strategic goals.