Tech Mahindra’s AI Bets Help Lift Margins as Q1 Profit Rises 28%

Tech Mahindra’s investments in artificial intelligenceand higher-value engineering work helped lift profitability in the June quarter, as the IT services company reported a 28.4% year-on-year increase in consolidated net profit.

The company on July 16 posted a consolidated net profit of ₹1,465 crore for the first quarter ended June 30, compared with ₹1,141 crore a year earlier. Revenue from operations rose 17.7% to ₹15,712 crore, while EBIT climbed 53.3% to ₹2,264 crore, pushing EBIT margin up 330 basis points to 14.4%.

The quarter adds to a broader trend across India’s IT industry, where companies are increasingly relying on AI-led transformation programmes and higher-value engineering work to improve profitability even as traditional technology spending remains uneven.

New deal wins stood at $1.08 billion, up 33.3% from a year earlier. 

Revenue in constant currency grew 6.6% year-on-year and 2.6% sequentially.

Chief Executive Mohit Joshi said the company’s growth reflected stronger client engagement, with the number of customers generating more than $50 million in annual revenue increasing by seven during the quarter, while all business verticals expanded from a year earlier.

“YoY growth of 6.1% coupled with three consecutive quarters of deal wins exceeding $1 billion dollars underscores the resilience of our business and the growing relevance of our offerings,” Joshi said in a statement.

Also, the management indicated it will continue to prioritise AI as an investment area. 

“We remain committed to building a future-ready organisation through continued investments in differentiated capabilities, domain-specific and sovereign AI, platforms, and talent—while maintaining a clear focus on growth and operational rigour,” said Chief Financial Officer Rohit Anand.

During the quarter, Tech Mahindra launched an Agentic Development & Modernisation Services portfolio and announced partnerships spanning enterprise AI search, autonomous cloud operations and AI-powered medical writing, as the company broadened its offerings around agentic AI.

It also highlighted multiple client wins in which AI engineering, AIOps and AI-led operations formed a core part of the engagement.

The company ended the quarter with 1,46,760 employees, down 863 sequentially, while IT attrition improved to 11.8% over the last 12 months.