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Informist, Thursday, Jul. 16, 2026

 

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--Tech Mahindra:Expect revenue growth momentum to continue subject to macros
--CONTEXT: Comments by Tech Mahindra's mgmt in post-earnings media call
--Tech Mahindra:Communications vertical sales up Q1 on ramp-up of large deals
--Tech Mahindra: Continuing to scale up agentic AI platform
--Tech Mahindra: Saw broad-based deal wins in Q1, largest from mfg vertical
--Tech Mahindra: Mfg vertical sales grew 9% QoQ in Q1, led by aerospace
--Tech Mahindra: Q1 margin expansion led by volume growth
--Tech Mahindra: Seasonal costs in Comviva reined in margin expansion Q1
--Tech Mahindra: Confident of achieving targeted 15?IT margin for FY27
--Tech Mahindra: Campus hiring to restart amid increasing revenue visibility
--Tech Mahindra: A lot of revenue growth coming from our largest customers
 

 

MUMBAI – A lot of Tech Mahindra Ltd.'s revenue growth is coming from its largest customers, with the growth in revenues from them outpacing the overall growth, the management said in a post-earnings media call Thursday. "We track our (client) accounts where we have more than $20 million in revenue. These...peak and prime accounts are growing significantly faster than the company average on a year-on-year basis," a senior official said.

 

The management was responding to a question on why the number of high-value clients had gone up on year and sequentially in the June quarter but there was an on-quarter and on-year decline in the revenue contribution of the top 10-20 clients. The company had 66 greater-than-$20 million clients in the June quarter, up from 60 in the year-ago quarter. The top 20 clients' revenue contribution, however, declined to 37.3% in the June quarter from 39% in the year-ago quarter. 

 

Tech Mahindra's management expressed confidence in achieving its earnings before interest and tax margin target of 15% for 2026-27 (Apr-Mar) amid the June quarter EBIT margin touching 14.4% in the June quarter, up 60 basis points sequentially. "I think we have had a strong start of the year. And based on the order book that we have, the client relationships that we have built, the talent that we have brought on board, and sort of the fact that (revenue) growth has actually been very broad-based," a senior official said.

 

The EBIT margin expansion in the June quarter "was led by volume growth and savings from Project Fortius, partially offset by Comviva seasonality and business mix," he said. Comviva Technologies is the company's subsidiary that specialises in product offerings to telecommunication and fintech clients. The effect of a "one-time transition associated with clients' post-acquisition integration and insourcing of cloud remedy," was also baked into the margins and revenues for the June quarter, according to the management.

 

The manufacturing vertical led the 2.6% on-quarter revenue growth in constant currency terms for the June quarter, according to the senior management. The vertical delivered 9% on-quarter revenue growth. This was "driven by sustained momentum in aerospace, along with earlier-than-planned execution of a large European automotive program, which contributed to higher revenue this quarter (Apr-Jun)," a senior official said.

 

The communications business under Comviva was supported by large deal ramp-ups and growth in top clients, he said. The management, however, cautioned that while the positive revenue growth momentum would continue, it would be subject to the vagaries of the broader macroeconomic environment and developments.

 

For the June quarter, Tech Mahindra reported new deal wins with total contract value of $1.08 billion, making it the third consecutive quarter of new deal wins exceeding $1 billion. New deal wins in the June quarter were broad-based across key verticals and geographies, "with the largest deal coming from the manufacturing and the healthcare life sciences verticals," according to the official.

 

On the progress made by the company in its agentic development and modernisation services portfolio, the management said this portfolio enables clients to accelerate their transition towards AI-led autonomous enterprise ecosystems. "Alongside this, we continue to scale our agentic AI platform ecosystem led by TechM Orion, which enables multi-agent orchestration across complex enterprise environments," a senior official said.

 

Responding to a question on campus hiring, the official said it had been "a little bit volatile" recently because of limited visibility into revenues. "Now that our visibility is stronger, I'm assuming that the campus hiring programme will restart," he said, adding the company did not have any campus hiring numbers "to share as of now for the annual intake that we expect to do."

 

The company reported sequential consolidated revenue growth of 2.6%, far higher than the 0.3-1.3% sequential rise seen by analysts in constant currency terms. Its revenue was up 6.6% on year in constant currency. In rupee terms, too, the company surpassed the Street's view with its revenue rising over 4% on quarter to INR 157.12 billion, far higher than INR 154.56 billion expected by analysts.

 

Tech Mahindra reported consolidated revenue of INR 157.12 billion, up 4.2% on quarter, while its net profit rose 8.2% on quarter to INR 14.65 billion. On Thursday, shares of the company closed at INR 1,510.30 on the National Stock Exchange, up 0.8% from Wednesday's close.  End

 

Reported by Rajesh Gajra

Edited by Avishek Dutta

 

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