Tech Mahindra Q3FY26 results: Net profit rises 14% to ₹1,122 crore

Revenue for the quarter grew 8.3 per cent to Rs 14,393 crore. On a quarter-on-quarter basis, revenue was up 2.8 per cent

Tech Mahindra reported net profit of ₹1,122 crore for the third quarter of FY26, up 14 per cent from the corresponding period of ₹932 crore.

 

On a sequential basis, net profit or profit after tax (PAT) was down 6 per cent due to the impact of the new labour codes.

 

Like peers, Tech Mahindra, too, saw an impact of ₹272.4 crore from the new labour codes during the quarter.

 

The company said that the ongoing quarterly impact of labour codes will be in the range of 10-20 basis points (bps).

 

Revenue for the quarter grew 8.3 per cent to ₹14,393 crore. On a quarter-on-quarter (Q-o-Q) basis, revenue was up 2.8 per cent.

 

 

New deal wins for the quarter came in at $1.1 billion, up 47 per cent from $745 million last year. On a sequential basis, TCV was up 34 per cent.

 

Mohit Joshi, chief executive officer (CEO) and managing director (MD), Tech Mahindra, said, “The third quarter has delivered a very strong performance. This is our best quarterly performance in the last three years and one which has the highest quarterly booking since the last five years.”

 

Joshi also reiterated that he is confident that the company will outperform its peer average in FY27.

 

Growth for the third quarter was driven by manufacturing, retail, logistic and transport and communications, which grew 11.7 per cent, 11.7 per cent and 4.7 per cent year-on-year (Y-o-Y), respectively.

 

Verticals such as banking, financial services and insurance (BFSI) were down 6.2 per cent sequentially and 0.8 per cent Y-o-Y while technology, media and entertainment fell 4.6 per cent Y-o-Y.

 

In terms of geography, Europe grew 11.2 per cent Y-o-Y and 2.2 per cent sequentially. America rose 2.1 per cent Y-o-Y and 3 per cent Q-o-Q.

 

The company continued to see a fall in its headcount. For the third quarter, total headcount was down by 872 people to 149,616. Joshi said the headcount drop is more because of efficiency due to more fixed-priced contracts.

 

“Two or three per cent drop in headcount is not a big number. I think we are quite clear that we see our fixed-price programmes as one huge area where we can drive a lot of efficiency,” said Joshi. He also added that fresher hiring for FY26 will be lesser than FY25, largely due to the demand environment. In FY25, Tech Mahindra had onboarded 6,000 freshers.

 

On artificial intelligence (AI), Joshi said it continues to be a growth pillar of its strategy as it supports clients to move from experimentation to execution. However, the company did not quantify the AI deal revenue.

 

“Nearly all our large deals are AI infused. It is almost impossible to win a large deal without showing our AI capability to clients,” said Joshi.

 

Joshi reiterated that the industry should come together on how AI can be priced.

 

Tech Mahindra has worked with analyst and research firm Forrestor, which talks about a new pricing model that incorporates AI. The model looks into human labour and the digital factor.