Tech Mahindra reported a steady fourth quarter performance for FY26, with profit and margins improving on the back of strong deal wins and continued push towards AI-led transformation.
The company posted a net profit of ₹1,354 crore ($145 million) in Q4 FY26, up 16% year-on-year, while revenue rose to ₹15,076 crore ($1.61 billion), up 12.6% YoY and 4.7% sequentially, even as the broader demand environment for IT services remains cautious.
EBIT (signifying core profitability) for the quarter grew 48.3% YoY to ₹2,084 crore ($223 million), with margins expanding to 13.8%, up around 330 basis points annually, indicating cost discipline and improved execution.
For the full financial year, the company reported revenue of ₹56,815 crore ($6.08 billion), up 7.2% YoY, while EBIT surged 39.2% to ₹7,152 crore ($765 million), indicating a sharp recovery in profitability. Net profit for FY26 rose 13.2% YoY to ₹4,811 crore ($512 million).
Deal Momentum
The management continues to position AI core to its growth strategy as part of its capability expansion.
“We are accelerating our transition to an AI-led organisation, embedding AI across services and expanding our capabilities to enhance value delivery for our clients. This is reflected in our highest deal wins in recent years including consecutive quarters exceeding $1 billion,” said CEO Mohit Joshi during the earnings call.
Tech Mahindra reported new deal wins of $1.07 billion in Q4, up 34.5% YoY, driven by large transformation contracts across telecom, BFSI, and enterprise segments.
The company noted that the key wins during the quarter included AI-led transformation deals in telecom, cloud, and infrastructure partnerships, and engagements focused on automation and zero-touch operations.
Speaking at a press conference, Joshi highlighted that the expectations around productivity are shifting with AI, but over the longer term, it expects AI-led transformation to drive increased spending on modernisation, application development and data.
“We have clearly seen a lot of the SaaS vendors release their own AI platforms, and that is an implementation opportunity for us… So, in the long run, we feel confident that AI will unleash a new wave of spending, and therefore a new cycle of growth for the services business,” said Joshi.
However, he maintained that the company’s plans outlined in FY24, including improving growth and achieving 15% margins, remain on track.
Margins Expand
The company highlighted that FY26 marked the end of its “stabilisation phase” of its transformation journey, with margins expanding for the 10th consecutive quarter.
Chief Financial Officer Rohit Anand said the company maintained disciplined capital allocation, increasing total dividend to ₹51 per share for FY26—its highest ever. The board recommended a final dividend of ₹36 per share, in addition to the interim dividend already paid.
Workforce and Operational Metrics
Tech Mahindra’s total headcount stood at 1,47,623, down slightly year-on-year, while the attrition remained at 12.1%.
The company indicated that it is on track to meet its FY27 goals, with a sharper focus on scaling AI-led offerings, improving deal conversion, and sustaining margin expansion.
The results come amid continued pressure on IT spending, with companies navigating slower discretionary demand even as AI begins to reshape deal structures and client priorities. Following the muted fourth-quarter performance of HCLTech, shares of several Indian IT firms witnessed a significant fall, with Nifty IT seeing a nearly 4% drop on Wednesday.
Tech Mahindra’s shares closed 2.5% lower at ₹1,463 apiece on the NSE.
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