Tech Mahindra’s Deal Wins Top $1 Billion Again, but Profit Misses

Tech Mahindra’s new deal wins topped $1 billion for a third consecutive quarter, and revenue grew at its fastest sequential pace in two years. Net profit missed Street estimates anyway, as a foreign exchange hit ate into the gains.

The numbers, declared after Thursday’s board meeting, mark the fourth straight quarter of margin expansion since Chief Executive Officer and Managing Director Mohit Joshi began a three-year overhaul at the Mahindra Group’s IT services arm. Deal wins and margins both moved in the right direction. Profit did not.

Deal Wins Cross $1 Billion for a Third Straight Quarter

New deal bookings came in at $1.078 billion for the quarter ended June 30, up 33.3% from a year earlier. It is the third consecutive quarter Tech Mahindra has closed more than $1 billion in new contracts, though the total was roughly flat from the previous quarter.

Revenue rose to ₹15,711.9 crore ($1.66 billion), up 4.2% from the prior quarter and about 17.6% from a year earlier. In constant currency terms, revenue grew 2.6% sequentially, more than double the 1% pace a CNBC-TV18 poll of analysts had projected going into the print.

Joshi said the client base contributing more than $50 million in annual revenue grew by seven accounts during the quarter, with every vertical posting growth from a year earlier.

YoY growth of 6.1%, coupled with three consecutive quarters of deal wins exceeding $1 billion, underscores the resilience of our business and the growing relevance of our offerings.

Joshi made the comment in the company’s results statement, pointing to the deepening of client relationships alongside broad-based growth across verticals.

Why Did Profit Miss Even as Revenue Beat?

Net profit of ₹1,465 crore missed Street estimates because a foreign exchange loss and higher employee costs ate into gains that otherwise flowed from the revenue beat and margin expansion. Brokerages had flagged a currency hit of roughly $30 million heading into the results, and the company has stopped adding new hedges.

Three separate brokerage polls had projected a bigger number. A CNBC-TV18 poll had estimated ₹1,694 crore. Bloomberg’s consensus estimate was ₹1,582 crore. A Zee Business poll had pegged it at ₹1,596 crore. Actual profit, up 8.2% from the March quarter and 28.4% from a year earlier, still landed below all three.

Brokerages had flagged the currency risk before results too. Whalesbook reported that a $30 million forex loss was expected to weigh on net profit, and that Tech Mahindra had stopped taking on new incremental hedges, leaving older positions to run off over the next one or two quarters.

Domestic brokerage Anand Rathi had written before the results that the quarter would be a “modest near-term negative” for Indian IT services, adding that it pointed to “stabilising demand rather than a meaningful recovery.” Tech Mahindra’s print undercut that caution on revenue and deal wins, even if profit did not escape the currency drag brokerages had already priced in.

Europe and Manufacturing Carry a Broad-Based Quarter

Europe was the standout region, with revenue rising 8.1% from the previous quarter and 12.1% from a year earlier, helped by the ramp-up of a large Telefonica contract. The region now accounts for 27.5% of Tech Mahindra’s total revenue.

Growth across business lines looked uneven but mostly positive:

• Manufacturing – up 9% sequentially and 17.2% year-on-year, helped by aerospace demand and an accelerated European automotive program
• BFSI – up 2.7% quarter-on-quarter, with management citing strong growth in financial services
• Communications – the largest vertical at 32.3% of revenue, down 1.3% sequentially but up 1.3% from a year ago
• Healthcare and retail – both flagged by Joshi as bright spots, with retail described as outperforming competitors

The quarter’s new contracts spanned continents. Tech Mahindra’s results statement detailed a New Zealand telecom operator’s five-year AI engineering deal, alongside a database administration contract with a global aerospace and defense company and a platform deal with a telecom group in Africa.

The Three-Year Bet Behind the Margin Climb

Tech Mahindra’s margin trajectory is the clearest evidence that Joshi’s turnaround is on schedule. EBIT climbed to ₹2,264 crore, up 53.3% from a year earlier, while the margin itself moved from 11.1% a year ago to 13.8% in the March quarter to 14.4% now, a fourth consecutive quarter of expansion.

Management called the quarter its strongest revenue growth since the transformation program began, and it is still targeting a 15% operating margin by the end of FY27, a goal repeated on every earnings call since the plan was first laid out.

1. 2023: Mohit Joshi takes over as CEO and Managing Director and lays out a plan to lift margins and outgrow the industry average.
2. April 2024: Tech Mahindra launches its Project Fortius transformation program, targeting a 15% operating margin by FY27.
3. April 2026: Full fiscal 2026 results show revenue of $6.39 billion and operating margin up 290 basis points to 12.6%, with large-deal contract value up 42% to $3.79 billion.
4. July 16, 2026: Q1 FY27 results show EBIT margin at 14.4% and a third straight quarter of deal wins above $1 billion.

Joshi has also had to manage geopolitical risk alongside the numbers. Discussing an earlier quarter’s results, he said about one percent of its workforce holds H1B visas, pushing back on concerns about tightening United States visa rules given how global the company’s client base has become.

Where the Turnaround Still Has to Prove Itself

Headcount kept shrinking. Total staff strength fell by 863 during the quarter to 146,760, even as attrition eased to 11.8% from 12.1% in the March quarter. Cash and cash equivalents stood at ₹9,695 crore at quarter end.

Some analysts remain unconvinced that cost-cutting alone can close the gap with larger rivals. Tech Mahindra’s growth still trails Tata Consultancy Services, HCL Technologies and Wipro on an absolute basis, and one market analysis published this year cautioned that cost discipline by itself may not sustain the current pace of momentum.

Market watchers have also pointed out that Tech Mahindra’s public messaging around artificial intelligence has been less prominent than some competitors’, even as the company embeds AI tools like Perplexity’s enterprise assistant across its own sales teams and pitches AI-led delivery to clients.

Shares Barely Move Despite the Beat

Tech Mahindra stock closed 1.13% higher at ₹1,515.60 ahead of Thursday’s results, a modest move for a quarter that beat on revenue, margin and deal wins. The stock has gained nearly 5% over the past month but remains down more than 9% over the last six months.

The muted reaction came even as the wider sector rallied. An eight percent Nifty IT rally over three sessions this month has been tied partly to a weaker rupee, which flatters dollar-denominated exporters like Tech Mahindra once their earnings are converted back home.

It followed a similarly split reaction elsewhere this earnings season. Trent’s 12% share slide after missing revenue estimates showed investors were in no mood to reward misses this quarter, even though Tech Mahindra’s own miss was confined to a single line of its income statement.

Tech Mahindra has three quarters left in its fiscal year to close the remaining 60 basis points to its 15% margin target, the final milestone in Joshi’s three-year plan.

Frequently Asked Questions

What were the headline numbers in Tech Mahindra’s Q1 FY27 results?

Tech Mahindra reported revenue of ₹15,712 crore ($1.66 billion) and net profit of ₹1,465 crore for the quarter ended June 30, 2026. Diluted earnings per share came in at ₹16.50, and free cash flow for the quarter totaled $167 million.

Why did Tech Mahindra’s profit miss estimates despite the revenue beat?

A foreign exchange loss estimated at around $30 million weighed on net profit, on top of higher employee costs. The company has stopped adding new currency hedges, so older hedge positions are expected to keep affecting results for another one to two quarters.

What is Project Fortius?

Project Fortius is Tech Mahindra’s company-wide cost-efficiency and delivery-optimization program, launched in April 2024 under Joshi, aimed at lifting operating margin to 15% by the end of FY27. The program has driven margin gains every quarter since, according to the company’s own results disclosures.

Has Tech Mahindra made any acquisitions recently?

Yes. The company holds an 85% stake in Canada’s Alluri Technologies, bought for ₹187.5 crore, with the remaining 15% due to transfer after three years subject to performance milestones. In July 2026, a Tech Mahindra subsidiary also completed the acquisition of Brazil’s Alyis Servicos Tecnicos for about ₹2.21 crore, to support its managed services work for Orange Business in Latin America.

How did Tech Mahindra’s stock react to the results?

Shares closed 1.13% higher at ₹1,515.60 ahead of the announcement, which came after Thursday’s board meeting. In the sessions beforehand, the stock had swung between an intraday high of ₹1,538 and a low of ₹1,504.25, reflecting investor uncertainty over which way the print would break.