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Informist, Wednesday, Apr. 22, 2026

 

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--Tech Mahindra: Deal pipeline remains strong across multiple sectors 
--CONTEXT: Tech Mahindra management's comments in post-earnings media call 
--Tech Mahindra: Focusing on larger clients, to help achieve FY27 margin aim 
--Tech Mahindra: Drop in headcount at co in recent years not meaningful 
--Tech Mahindra: Will focus on bite-sized acquisitions rather than large buys

 

MUMBAI – Despite its peers opting for larger acquisitions focused on accelerating services linked to artificial intelligence, Tech Mahindra Ltd. Wednesday said it would rather focus on 'tuck-in' or 'bite-sized' purchases rather than 'needle-moving' acquisitions. "We have a capital allocation policy which is very much focused on returning money back to shareholders, so we have 85%+ free cash flow that goes back to investors," the tech major's Chief Executive Officer and Managing Director Mohit Joshi told reporters in a post-earnings press conference.

 

"We will probably see a couple of tuck-in acquisitions, but over the next 12 months, never say never," he said. Tuck-in acquisitions are deals in which a larger firm acquires a smaller company and fully integrates it into its existing operations rather than running it as a standalone firm.

 

"We have also used this time to integrate the acquisitions that we've historically done much more tightly with Tech Mahindra and been able to drive significant revenue synergies through this integration," Joshi said. "That will continue to be the focus for us."

 

For the March quarter, on a consolidated basis, Tech Mahindra reported a net profit of INR 13.54 billion, below analysts' estimates, while its revenue stood at INR 150.76 billion, higher than estimates.

 

Tech Mahindra's information technology headcount fell to 75,377 in the March quarter from 76,194 in the December quarter and 80,609 in the year-ago quarter. Joshi said the moderation in staffing is not "meaningful". "The overall budget environment has remained pretty flat, so growth has been pretty muted; that obviously has an impact on the headcount," he said.

 

Additionally, the company has been able to use certain tools to enhance productivity, which helps it use a select pool of talent for other opportunities, he said. "We still remain very confident about our ability to drive growth. And for growth, we will always require talent," Joshi said.

 

Tech Mahindra reported an earnings before interest and tax margin of 13.8% for the March quarter and 12.6% for the financial year 2025-26 (Apr-Mar). It has set a target of pushing the EBIT margin to 15% in FY27. "We have done a lot of work to shape the portfolio, to focus on our largest clients where we feel we can have maximum growth and maximum opportunity," the chief executive officer said. "So there is something that we have been working on and we retain our confidence in our ability to deliver the 15% margin for the year."

 

The company also has a "very strong" deal pipeline, Joshi said. In the March quarter, it recorded deal wins of $3.79 billion over the trailing 12 months. "This (deal momentum) is strong across multiple sectors," he said. "Historically, we have had a leadership position in telecom and manufacturing, and that's where a lot of the pipeline is." The company has a strong pipeline in the healthcare, banking, financial services, and insurance, and retail verticals as well.

 

The current geopolitical crisis in West Asia has had some impact but nothing meaningful, the company said. "If it feeds into a broader global recession, then it would have a more material impact on us," Joshi said.

 

Wednesday, Tech Mahindra's shares closed 2.6% lower at INR 1,462.60 on the National Stock Exchange.  End

 

Reported by Anand JC and Arya S. Biju

Edited by Rajeev Pai

 

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