Analysts split on Tech Mahindra's prospects, see limited upside

Tech Mahindra reported a revenue of ₹13,350 crore for the April-June quarter of the 2025-2026 (Q1FY26), representing a decline of 1.4 per cent quarter-on-quarter (Q-o-Q) and down 1.0 per cent year-on-year (Y-o-Y) in constant currency (CC) terms.

- DEVANGSHU DATTA

On sequential basis in USD terms, the communications vertical was up 2.8 per cent Q-o-Q, BFSI (banking, financial services & insurance) was down 0.6 per cent Q-o-Q, manufacturing up 4.0 per cent Q-o-Q, hi-tech & media up by 1.3 per cent Q-o-Q, retail, transport & logistics down by 1.0 per cent and healthcare up by 0.1 per cent Q-o-Q.

Geography-wise, the Americas were up 2.6 per cent Q-o-Q, Europe up by 3.6 per cent Q-o-Q and the rest of world (ROW) down by 4.5 per cent Q-o-Q.

The Ebit margin increased 60 basis points (bps) Q-o-Q to 11.1 per cent. The profit after tax (PAT) was ₹1,140 crore (down 2.2 per cent Q-o-Q, up 33 per cent Y-o-Y), and in rupees terms, revenue grew 2.7 per cent, Ebit grew 34 per cent and PAT (profit after tax) grew 34.0 per cent Y-o-Y.

New deals with Total Contract Value (TCV) of $809 million were announced, up 44 per cent Y-o-Y. The headcount was down 214 Q-o-Q to 1,48,517 employees. Attrition increased by 80 bps Q-o-Q to 12.6 per cent. Utilisation was down by 130 bps Q-o-Q at 85 per cent. The number of $50 million+ clients was at 26, up by one Q-o-Q.