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Informist, Friday, Jan. 16, 2026

NEW DELHI – Tech Mahindra Ltd. delivered its strongest-ever quarterly performance in the December quarter and secured the highest number of deal wins in five years, aided by a firmer demand environment, the tech major's executives told a post-earnings press conference Friday. "I wouldn't say that there's a dramatic change or that, you know, we're off the races, but it certainly reflects that the environment is slightly more stable. But within that, we're delivering much better," Chief Executive Officer Mohit Joshi said.

Tech Mahindra reported a consolidated net profit of INR 11.22 billion for the December quarter, lower than analysts' expectations of INR 13.81 billion. Its revenue increased to INR 143.93 billion, a touch higher than expectations of INR 141.68 billion.

Its consolidated earnings before interest and tax margin for the quarter improved by 100 basis points on quarter to 13.1%. This expansion in the EBIT margin can be attributed to measures related to sales to top accounts--where the company can sell multiple services at a higher margin--operating discipline, and selling high-end services at a premium, among other things. 

"I think it's a combination of these measures, which is why you haven't seen like a single quarter of massive margin jumps and then a decline," Tech Mahindra Chief Financial Officer Rohit Anand said. "It is a multiplicity of factors that we hope still has some way to go."

Looking ahead, Tech Mahindra reiterated its confidence in outperforming the industry over the medium term. "We've been quite consistent about the fact that we expect to outperform our peer average in FY27, and that conviction and confidence still very much stands," the management said.

Tech Mahindra said its deal-win momentum remained strong in the December quarter, with management indicating visibility across verticals. "Most importantly, the deal momentum has remained robust throughout the quarter. We have recorded our highest quarterly deal bookings in the last five years," the management said, adding that the overall pipeline continues to be "very strong", though large deal closures remain lumpy by nature.

The spending trend in the US automotive segment remains uncertain, at least in the near term, the management said. "The US automotive segment continues to remain in a wait-and-watch mode and we expect demand trends to turn more positive over the medium term," it said. The company's retail, logistics, and transport segment grew 4% on a sequential basis and about 12% on year.

The company flagged some worries in the performance of its hi-tech vertical. "On a quarter-on-quarter basis, it has been a high performer for us, but on a year-on-year basis it has been challenged," the management said. "I do feel that in the hi-tech sector, we still continue to see a reasonable amount of volatility... and that sector will remain volatile for the next couple of quarters." The company's technology, media, and entertainment segment was up 3% on quarter but down 4.6% on year.

As more and more companies adopt artificial intelligence en masse, Tech Mahindra said the technology has become integral to large-client engagement. "Almost all of our large deals are now AI-infused," the management said. "It is impossible to win a large deal today unless you are able to demonstrate how you will drive productivity through AI." It added that client programmes are increasingly moving from pilot stages to scaled, multi-year deployments.

The company also flagged the need for an industry-wide framework to monetise AI-led productivity gains. "We think it's very important for the industry to develop a standard for how people actually charge for digital labour." According to the management, the company is exploring token consumption as a basis for pricing AI usage separately from human labour.

The company expects the financial impact of the new labour codes to be limited. The management said the impact is likely to be "anywhere in the range of 10-20 basis points" and will be factored into margin planning.

On capital allocation, the company said it is not pursuing large transformational acquisitions at this stage. "Our growth will largely be organic... we continue to look at token acquisitions that bring us specific capabilities, but we are not looking at any large-scale transformational mergers and acquisitions at this time," the management said.

Addressing the concern about visa-related uncertainty, Tech Mahindra said fresher hiring decisions are independent of developments around the H-1B visa. "I don't think fresher adoption is linked at all to H-1B issues," the management said, noting that the company's US workforce is largely locally based.  End

Reported by Anand JC and Pallavi Singhal

Edited by Rajeev Pai

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