Tech Mahindra demonstrated growth in its first quarter of the fiscal year 2026-27. The company's consolidated net profit increased by 31.7% compared to the same period last year, reaching ₹1,486.3 crore. This growth occurred amid an increase in revenue and operating profit.
First Quarter Financial Results
Operating revenue grew by 17.7% compared to the previous year, amounting to ₹15,711.9 crore, up from ₹13,351.2 crore a year earlier. On a sequential basis, net profit grew by 9.6% compared to the March quarter, and revenue increased by 4.2% to ₹15,076.1 crore.
Profit attributable to equity shareholders was ₹1,465.1 crore, which is 28.4% higher than the previous year. Profit attributable to non-controlling interests was ₹21.2 crore.
EBIT Growth and Margin Expansion
Earnings Before Interest and Taxes (EBIT) increased by 53.3% year-on-year, reaching ₹2,264 crore. Meanwhile, the EBIT margin expanded by approximately 330 basis points to 14.4%. Sequentially, EBIT grew by 8.6%, and the margin improved by approximately 60 basis points.
Total expenses rose by 13.4% to ₹13,559.3 crore from ₹11,951.9 crore. Employee benefits expenses increased by 5% to ₹7,876.6 crore, while subcontracting expenses grew by 36.6% to ₹1,790.9 crore. Other expenses increased by 26.7% to ₹3,301.9 crore.
Financial costs rose by 43.1% to ₹111.3 crore, and depreciation and amortization expenses grew by 4.5% to ₹478.6 crore. Earnings before tax increased by 26.2% to ₹2,041.9 crore. Basic earnings per share reached ₹16.53, and diluted EPS was ₹16.50.
Growth in IT and BPS Segments
The Information Technology segment revenue increased by 17.6% year-on-year, reaching ₹13,245 crore, and its segment result grew by 39.9% to ₹2,903 crore. Business Process Services revenue increased by 18.2% to ₹2,466.9 crore, and its segment result grew by 30.4% to ₹437.6 crore.
The company noted that revenue in dollar terms grew by 6.1% year-on-year and 2.2% sequentially, totaling $1.66 billion. In constant currency terms, revenue increased by 6.6% year-on-year and 2.6% sequentially.
Geographical Distribution and Verticals
The strongest geographical growth was recorded in Europe, where revenue grew by 12.1% year-on-year. Revenue from America increased by 4.8%, and business from the rest of the world showed growth of 2.5%.
Among industry verticals, the manufacturing sector (17.2%), banking, financial services and insurance (8.1%), and communications (1.3%) demonstrated revenue growth.
New Deals and Corporate Changes
The volume of new deals grew by 33.3% year-on-year, reaching $1.08 billion. This marks the third consecutive quarter where the volume of won deals exceeded the one billion dollar mark. The number of clients generating annual revenue of at least $50 million increased from 26 to 33. Clients with annual revenue of at least $10 million grew from 108 to 115.
The total number of employees was 146,760, a decrease of 863 people sequentially. The IT specialist staff decreased by 688 people to 74,689. The employee attrition rate over the last 12 months improved to 11.8% from 12.6% the previous year.
Free cash flow increased by 94% year-on-year, reaching $167 million, equivalent to 108% of after-tax profit. The days sales outstanding metric improved to 84 days from 95 days.
On May 27, the company acquired an 85% stake in the Canadian company Alluri Technologies, also known as Avant, for ₹187.5 crore. The company plans to acquire the remaining 15% in three years, subject to meeting certain milestones.
