Tech Mahindra reported a strong Q3 FY26, marked by record quarterly deal bookings of $1.096 billion, the highest in five years. Revenue grew by 2.7% year-on-year and 1.5% QoQ. Operating margins expanded to 13.1%. The company is confident in exceeding peer average growth and progressing towards a 15% EBIT margin by FY27, driven by disciplined execution and strategic investments.
Financial Performance Highlights
Tech Mahindra’s Q3 FY26 results showcased significant improvements across key metrics. Revenue reached $1.61 billion, up 1.5% sequentially and 2.7% year-on-year. Operating profit increased to $211 million, with operating margins expanding to 13.1%, marking the ninth consecutive quarter of margin expansion. Gross margin improved by 120 basis points QoQ. The company’s effective tax rate stood at 25.7%. The profit after tax margin before exceptional items was 9.2%.
Deal Wins and Strategic Growth
The company reported robust deal wins totaling $1.096 billion, a 48% increase year-on-year. A strategic engagement with a leading European telco stands out, valued at over $500 million over five years. Three new clients were added in the $50 million+ revenue range, reinforcing strong client relationships.
Segment Performance
Communications vertical grew by 4.7% year-on-year. Manufacturing continued its strong performance with 11.7% year-on-year growth. Retail, travel and logistics also performed strongly, delivering 11.7% year-on-year growth. The BFSI sector experienced a slight decline of 0.8% year-on-year due to higher-than-usual furloughs. Americas grew by 2.1% YoY while Europe delivered a strong growth of 11.2% YoY. The hi-tech vertical declined by 4.6% YoY.
Strategic Initiatives and Outlook
Tech Mahindra is focused on leveraging AI across its operations and client solutions. The company signed an MoU with the University of Texas at Dallas for AI-led innovation. The company maintains its focus on sustaining operating rigor and delivering its FY27 strategic goals. It expects to grow higher than the peer average by the end of FY27 and progresses towards a 15% EBIT margin.
Source: BSE
