Tech Mahindra Q1 profit up 28% as $1bn deal streak continues
Tech Mahindra's first-quarter profit surged 28% as a 330-basis-point margin expansion and a third straight quarter of billion-dollar deal wins signal sustained demand in its European and manufacturing markets.
Tech Mahindra reported a consolidated net profit of ₹1,465.1 crore for the quarter ended June 2026, a 28.4% increase from the prior year. Shares closed 1.15% higher at ₹1,515.85 in Mumbai. Earnings before interest and tax climbed 53.3% to ₹2,264 crore, pushing the EBIT margin up by 330 basis points to 14.4%.
The Indian IT services provider recorded revenue of $1.66 billion, representing 6.6% year-on-year growth in constant currency terms. The 15% surge in reported rupee revenue to ₹15,605.5 crore was partially inflated by currency fluctuations against the dollar.
Both core business units delivered robust margin expansion. The IT division grew revenue 17.6% to ₹13,245 crore, lifting segment profit by 39.9%. The business process services unit posted an 18.2% revenue increase to ₹2,466.9 crore, with segment profit rising 30.4%.
For investors, the primary driver was operating leverage. While revenue scaled, employee benefit expenses grew only 5% to ₹7,876.6 crore. A 36.6% jump in subcontracting costs to ₹1,790.9 crore indicates a shift toward a more flexible delivery model rather than adding permanent headcount.
Europe drove the geographic performance with 12.1% year-on-year revenue growth, outpacing the Americas at 4.8%. Manufacturing was the strongest vertical, growing 17.2%, followed by banking and financial services at 8.1%, while the communications segment lagged at 1.3%.
New deal wins reached $1.08 billion, marking the third consecutive quarter above the $1 billion threshold. The company is successfully consolidating its client base, with accounts generating over $50 million in annual revenue increasing to 33 from 26 a year earlier.
The strategic shift in workforce composition was evident as total headcount fell by 863 employees sequentially to 146,760. Annualized attrition improved to 11.8% from 12.6%. The company also acquired an 85% stake in Canadian firm Alluri Technologies for ₹187.5 crore in May.
"YoY growth of 6.1% coupled with three consecutive quarters of deal wins exceeding $1 billion dollars underscores the resilience of our business and the growing relevance of our offerings. Equally encouraging is the continued deepening of client relationships, with our $50 million-plus client base up by seven and all verticals delivering growth YoY," said CEO Mohit Joshi. CFO Rohit Anand cited "broadbased growth, margin expansion, and disciplined working capital management," noting continued investment in "domain-specific and sovereign AI."
