Tech Mahindra Clocks $1 Bn in Q2 Deal Wins as Profit Rises 23.2%

Tech Mahindra’s Q2 FY27 profit after tax (PAT) rose 23.2% year on year (YoY) to $166 million. The company recorded $1.023 billion in new deal wins during Q2 FY27, up 25.4% year on year. Trailing 12-month deal wins increased 34.8% over the same period a year earlier. Mohit Joshi, CEO and Managing Director of Tech Mahindra said almost all of its large deals have AI integration during the earnings call. 

Revenue rose 7.2% YoY in constant currency to $1.693 billion for the quarter ended September 30, 2026. On a sequential basis, revenue grew 2.4% in constant currency. In rupee terms, revenue stood at ₹16,180 crore, up 15.6% YoY.

The company's earnings before interest and tax (EBIT) margin expanded 40 basis points sequentially to 14.8%. Tech Mahindra said this marked its 12th consecutive quarter of margin expansion. 

Chief Financial Officer Rohit Anand said EBIT margin expansion was driven by “strong volume growth” and project cost savings, partly offset by wage hikes. Tech Mahindra reiterated its target of achieving a 15% EBIT margin for FY27.

Joshi said the company was building an AI tool chain for every business and service line, alongside industry-specific transformation roadmaps for sectors such as telecommunications, financial services and manufacturing.

On a year-on-year basis, the communications business grew 9.5%, supported by large-deal ramp-ups and new engagements. Retail, travel and logistics revenue increased 9.2%, while manufacturing grew 7%. High technology revenue rose 6.7%, healthcare grew 6.2%, and banking and financial services increased 4.6%.

During the earnings call, The IT company said it had launched Indus Terra, an education-focused language model for students in Grades 2–12. It described it as a 30-billion-parameter model developed with NVIDIA and AWS as part of the IndiaAI Mission.

In September, Tech Mahindra partnered with Infinite Uptime to apply physical AI in manufacturing.

The company generated $135 million in free cash flow during the quarter. Management said the ramp-up of new deals had affected quarterly cash flow and expected the impact to normalise in the following quarter. Anand reiterated its target of converting 90–100% of PAT into free cash flow for the full year.

The company's effective tax rate stood at 29.9%, reflecting a one-time adjustment related to a prior-period tax matter. Excluding this adjustment, the tax rate was 26.6%.

The board declared an interim dividend of ₹15 per equity share with a face value of ₹5 and approved a 1:1 bonus issue. Under the bonus issue, shareholders will receive one additional equity share for every share held, subject to applicable terms and conditions.