Tech Mahindra's Net Profit up by 34% in June Quarter
By Ankur Chandra | Published at: Jul 16, 2025 07:10 PM IST
Noida, July 16, 2025 – Tech Mahindra Limited (NSE: TECHM) reported a 34% year-on-year rise in net profit for Q1 FY26. It marked seventh consecutive quarter of margin expansion. The growth was driven by robust execution, strong deal wins, and continued operational discipline across key verticals.
The margin gains reflect structural improvements from its Project Fortius initiative and cost optimization efforts. The IT segment led revenue growth and maintained higher margins than BPS. Strategic deal momentum and partnerships have strengthened earnings visibility and business resilience.
Tech Mahindra closed near the upper end of its 52-week range, settling at ₹1,608.50. The stock traded firmly within a ₹1,577.30–₹1,611.00 band. Nearly 54% of the traded shares were delivered, suggesting active investor interest. The free-float market cap stood at ₹1.01 lakh crore.
Key Consolidated Financial Highlights (₹ in crore)
| Particulars | Q1 FY26 | Q4 FY25 | Q1 FY25 | YoY Change | QoQ Change |
|---|---|---|---|---|---|
| Revenue from Operations | 13,351.2 | 13,384.0 | 13,005.5 | +2.7% | -0.2% |
| EBIT | 1,477.0 | 1,867.4 | 1,164.6 | +34.0% | -20.9% |
| EBIT Margin (%) | 11.1% | 10.5% | 8.5% | +260 bps | +60 bps |
| Profit Before Tax (PBT) | 1,618.1 | 1,464.2 | 1,178.1 | +37.3% | +10.5% |
| Net Profit (PAT) | 1,140.6 | 1,166.7 | 851.5 | +34.0% | -2.2% |
| Diluted EPS (₹) | 12.86 | 13.15 | 9.60 | +34.0% | -2.2% |
Source: Q1 FY26 Earnings Release and Presentation
Segment Performance
| Segment | Revenue (₹ Cr) | QoQ Growth | YoY Growth |
|---|---|---|---|
| IT | 11,263.7 | -0.6% | +2.8% |
| BPS | 2,087.5 | +1.5% | -1.9% |
- The IT services segment contributed 84.4% to total revenue.
- Segment EBIT margin was higher in IT (18.4%) than BPS (16.1%).
Business Momentum
- New Deal Wins: USD 809 million TCV in Q1 FY26, up 51% YoY.
- Free Cash Flow: USD 86 million.
- Headcount: 1,48,517 employees (+897 YoY), with LTM attrition at 12.6%.
- Cash Reserves: ₹8,072 crore.
Key Wins and Strategic Announcements
- Chosen by a US-based telecom operator as its “growth partner” for customer operations transformation.
- Signed multi-year deals with:
- A global fashion apparel brand for digital and data transformation.
- A Japanese subsidiary of a global insurer for full-stack modernization.
- UK-based manufacturer to build a shared services center.
- Announced strategic partnerships with Cisco, ServiceNow, Red Hat, CrateDB, KOGO AI, and Nuix to enhance cloud, AI, and cybersecurity capabilities.
Management Commentary
Mohit Joshi, MD & CEO:
“Our performance is steadily strengthening, reflecting disciplined execution and a focused strategy. Deal wins have increased by 44% on a last twelve months (LTM) basis, supported by broad-based momentum across verticals and geographies.”
Rohit Anand, CFO:
“We have delivered seven consecutive quarters of margin expansion – a clear reflection of the discipline and focus across our organization. Even in an uncertain environment, our Project Fortius program continues to generate meaningful results.”
Outlook
Margin gains and deal wins reflect strong execution and stable demand across verticals. The market is reading this as a sign of sustained profitability despite revenue softness. Continued focus on cost controls and strategic partnerships could strengthen earnings resilience going forward.
About the Company
Tech Mahindra Limited is a listed global technology consulting and digital solutions company, part of the Mahindra Group. It operates in over 90 countries with more than 148,000 professionals serving 1,100+ clients. The stock is listed on NSE (TECHM) and BSE (532755). It has consistently been included in sustainability indices like FTSE4Good and has received top ESG ratings, including an ‘A’ across all CDP categories.
REF: https://nsearchives.nseindia.com/corporate/TECHM_16072025161036_IntimationofOutcomeQ1FY26_Signed.pdf
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