Tech Mahindra kicked off its FY26 earnings season with a mixed bag — posting a 34% year-on-year rise in Q1 net profit, but missing analyst estimates on key fronts. The company reported a consolidated net profit of ₹664 crore for the quarter ended June 2025, up from ₹495 crore in Q1 FY25.
While the growth appears healthy on paper, the market had higher expectations. Shares of Tech Mahindra were in focus on Dalal Street today as investors digested the numbers and commentary from management.
Key Numbers
Net Profit (Q1 FY26): ₹664 crore (▲ 34% YoY)
Revenue: ₹13,290 crore (▲ 3.3% YoY, flat QoQ)
EBIT Margin: 6.6% (▼ from 7.4% in previous quarter)
Order Book (TCV): $359 million
The company’s operating margin contracted sequentially, and revenue growth remained tepid — signaling ongoing headwinds in the global IT spending environment, especially in telecom and BFSI verticals.
What Dragged Performance
Despite the profit surge, analysts had penciled in stronger performance across parameters. The disappointments stem from:
Weak traction in key verticals like telecom
Flat sequential growth, which underwhelmed
A slight decline in margins due to higher costs and pricing pressure
An order book that didn’t excite the street
Management Commentary
CEO Mohit Joshi said the company is focusing on cost optimization and sharpening its vertical go-to-market strategy. He emphasized long-term tech transformation and AI capabilities but acknowledged short-term softness in client spending.
Market Reaction
Tech Mahindra shares opened flat and showed mild volatility in early trade
Investor sentiment was cautious, with brokerages likely to recalibrate FY26 forecasts
Analysts believe the near-term upside may be limited unless large deal wins pick up
Analyst Take
CA Manish Mishra, tech sector analyst:
“The YoY growth is respectable, but the quarter lacked operational zing. Margins underwhelmed, and revenue growth didn’t match peers like Infosys or TCS.”
CA Manoj Kumar Singh, equity strategist:
“Investors will need to see signs of stronger execution and pipeline acceleration. TechM remains a long-term value buy but not a momentum play right now.”
Conclusion
Tech Mahindra’s Q1 earnings reflect a company in strategic transition, still finding its footing amid global tech demand uncertainties. The positive profit growth shows resilience, but the lack of margin and revenue momentum suggests more work ahead. Investors would be wise to monitor upcoming deal announcements and margin recovery trends before turning bullish.
