Tech Mahindra Q1 Net Profit Rises 28.4 PC to Rs 1,465 Cr; Company Sees Positive Demand Environment

New Delhi: IT company Tech Mahindra on Thursday reported a 28.4 per cent rise in consolidated net profit for the June quarter at Rs 1,465 crore, and expressed confidence about the demand environment.

India’s fifth-largest IT services firm said growth in the June quarter was broad-based, led by manufacturing and financial services, with strong momentum also in healthcare and retail. Tech Mahindra management expressed confidence about a “sustained” performance through the rest of the year, provided the macroeconomic situation does not change dramatically.

The company said its strong order book, long-standing client relationships and robust first-quarter performance give it confidence in sustaining growth through the remainder of the year and outperforming the peer average.

Tech Mahindra’s revenue from operations was up 17.7 per cent at about Rs 15,712 crore during the quarter just ended. In dollar terms, the Q1FY27 revenue at USD 1,660 million came in 2.2 per cent higher sequentially and was up 6.1 per cent on a year-on-year basis in reported terms.

“We have delivered an extremely strong quarter, clearly industry-leading growth, way ahead of our consensus estimates. So clearly, we’re seeing a positive demand environment from the company perspective…all the hard work that has gone into capability building, hiring talent, winning new clients, winning in consolidation deals is paying off for us,” Mohit Joshi, CEO and Managing Director, Tech Mahindra, said during Q1 results briefing.

Tech Mahindra cited the three-year turnaround plan it had presented in April 2024 with clear goals and measurable markers for success and said it is seeing increased benefits of investments and actions taken over the past years.

“Most recently, our growth has begun to move ahead of the peer average…we had said that in the third year of transformation, we will pivot strongly to growth, and our numbers show just that,” Joshi said.

The IT firm said it will restart campus hiring.

“As far as campus hiring is concerned, it has been a little bit volatile because we’ve had limited visibility into revenues. Now that our visibility is stronger, I’m assuming that the campus hiring programme will restart,” Joshi said, but did not divulge specific targets on expected annual intake.

Among the major verticals, communications (which accounts for 32.3 per cent of revenue) grew 1.3 per cent year on year, but fell 1.3 per cent sequentially. The manufacturing vertical (with 19.3 per cent contribution) saw a 17.2 per cent growth y-o-y, and BFSI (16.7 per cent contribution) grew 8.1 per cent year-on-year, with healthy demand in payment modernisation, wealth platforms and AI-led transformation.

Retail, logistics and transport – which contribute 8.1 per cent to the revenue – grew 8.6 per cent y-o-y, aided by momentum across e-commerce expansion, logistics modernisation, and automation, among factors.

“Overall, every vertical delivered year-on-year growth. Based on the pipeline and ramp-up of recent deal wins, we expect positive momentum to continue, subject to the broader macroeconomic environment,” Joshi said.

He highlighted that “equally encouraging” is the continued deepening of client relationships, with a USD 50 million-plus client base up by seven.

Rohit Anand, Chief Financial Officer, Tech Mahindra, said that the company delivered a strong Q1 performance with margin expansion and disciplined working capital management, reflecting consistent execution and sustained business momentum.

“We remain committed to building a future-ready organisation through continued investments in differentiated capabilities, domain-specific and sovereign AI, platforms, and talent – while maintaining a clear focus on growth and operational rigour,” Anand said.

New deal wins, measured by total contract value, stood at USD 1,078 million, up 33.3 per cent year-on-year.

The earnings season for India’s IT services sector is now in full swing, with major companies reporting their June quarter performance. Besides Tech Mahindra, Wipro too reported Q1FY27 earnings on Thursday.

Bengaluru-headquartered Wipro posted almost flat consolidated net profit of Rs 3,352 crore in the April-June quarter of FY27, in a macro environment described by the management as “resilient” but marked by uncertainties influencing client decisions. Its revenue from operations grew 10.6 per cent to Rs 24,478.6 crore in Q1 FY27 from Rs 22,134.6 crore in Q1 FY26. Sequentially, the profit declined 4.2 per cent while revenue inched up marginally by 1 per cent.

Earlier this week, HCL Technologies reported a more than 20 per cent rise in consolidated net profit to Rs 4,624 crore for the June quarter on “good all-round performance” and retained its FY27 revenue growth guidance of 1-4 per cent, citing strong deal momentum and a positive outlook.

Last week, the country’s largest IT services company, TCS, reported a 4.61 per cent increase in its June-quarter net profit to Rs 13,349 crore, and guided towards an improvement in demand, impacted by the West Asia crisis, returning in the ongoing quarter.

Infosys is scheduled to announce its Q1 FY27 financial results on July 23.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)