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Informist, Friday, Jan. 16, 2026

By Shakshi Jain

NEW DELHI – Information Technology services major Tech Mahindra Ltd. Friday reported a mid single-digit sequential fall in its consolidated bottom line for the December quarter due to a one-time impact from the new labour codes. It was the company's worst bottom line performance in four quarters. However, the IT major's consolidated top line rose sequentially by a low single digit for the quarter, led by an uptick across all the verticals of the company, barring the banking, financial services, and insurance segment. Tech Mahindra recorded earnings before interest and tax margin expansion for the ninth consecutive quarter in Oct-Dec.

The Pune-based company's consolidated top line in the reporting quarter increased 2.9% sequentially to INR 143.93 billion. This was much higher than analysts' consensus estimate of INR 141.68 billion for the December quarter. On a year-on-year basis, the company's revenue from operations rose over 8% in the quarter. 

Tech Mahindra's consolidated bottom line in the December quarter fell 6% sequentially but rose over 14% on year to INR 11.22 billion. Its net profit for the quarter was dragged down by a one-time cost of INR 2.72 billion on implementation of the manadates under the new labour codes.

As per the new labour codes, basic pay must account for at least 50% of an employee's total cost to the company. As a result, payouts tied to statutory contributions such as gratuity have increased for companies.

In the absence of the one-time cost, the company's net profit would have been around INR 13.94 billion, the increase in tax notwithstanding. This is largely in line with the INR 13.81 billion expected in net profit by the Street.

In constant currency terms, the revenue of India's sixth-largest IT firm in terms of market capitalisation rose 1.7% on quarter and 1.3% on year in the December quarter. In dollar terms, Tech Mahindra's revenue in the reporting quarter grew 1.5% sequentially and 2.7% on year to $1.61 billion.

For the nine months ended Dec. 31, the company's consolidated bottom line grew 12% on year to INR 34.57 billion and top line rose 5.4% to INR 417.39 billion. 

OPERATIONAL PERFORMANCE

Tech Mahindra's consolidated earnings before interest, tax, depreciation, and amortisation totalled INR 23.66 billion in the December quarter, up over 9% on quarter and over 26% on year. Its EBIT margin in the reporting quarter expanded by 100 basis points on quarter to 13.1%, according to the company.

The IT players reported new deal wins worth $1.10 billion for the December quarter, up 34.3% on quarter. "Our deal wins on an LTM (last twelve months) basis are the highest we have achieved in the past five years, reflecting an improved deal-win run-rate over the past several quarters," company Chief Executive Officer Mohit Joshi said in a presentation to investors.

Tech Mahindra's Chief Financial Officer Rohit Anand said a sustained focus on working capital discipline has led to improved cash flows and that the company was on track to achieve its 2026-27 (Apr-Mar) goals.

In the December quarter, Tech Mahindra generated $194 million in free cash flow. The company aims to reach an EBIT margin of 15% by the end of FY27. The large-cap IT company's workforce included 149,616 employees as of Dec. 31, down by 872 on year. Tech mahindra's attrition rate on last twelve months basis was 12.3%.  More

Revenue from the company's core IT services business registered a 2.6% sequential growth in the December quarter to INR 120.76 billion. This division accounted for nearly 84% of the company's overall top line for the quarter. Revenue from business process services, which accounted for the remaining 16% of Tech Mahindra's top line for the quarter, rose around 4% on a sequential basis.

VERTICALS, GEOGRAPHIES

Revenues from Tech Mahindra's core communications vertical, which contributed 33.1% to its overall top line in the December quarter, rose 2.8% on quarter. In the manufacturing vertical, revenue contribution in the December quarter stood at 18.3% of the overall sales, growing 2.2% on quarter. Meanwhile, the banking, financial services, and insurance vertical was a laggard with a 6.2% sequential fall in its revenue for the December quarter. It accounted for 15.5% of the company's overall top line in the quarter. 

Geography-wise, Americas accounted for nearly 51% of the company's overall top line in the December quarter, growing 3.1% on quarter and 2.1% on year. Revenues from Europe grew 2.2% on quarter and 11.2% on year in Oct-Dec, accounting for over a quarter of the company's total sales for the three months. However, revenues from rest of the world, which accounted for nearly 24% of the overall sales, fell 2.3% on quarter and 4% on year in the reporting quarter.

Friday, shares of the company ended 5.2% higher at INR 1,670.50 on the National Stock Exchange. The company disclosed its December-quarter earnings after market hours.  End

US$1 = INR 90.86

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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