Mumbai | October 15, 2025 -Shares of Tech Mahindra Ltd fell more than 1 percent in the early trade on Wednesday, following the IT services giant reporting a 4.44 percent year-on-year (YoY) fall in its September quarter (Q2 FY26) net profit. Although margins were stronger and the record deal wins were there, the macroeconomic headwinds and slow growth of key markets weighed on the sentiment of the investors
Technology Mahindra stocks had a price of 0.9 percent lower at 10.30 am, at 1,451.80 at the NSE compared to the last close
Q2 FY26 Highlights
The net profit of the company was 1,194.5 crore, which was against 1,250 crore during the same quarter last year. But the profit margin was slightly better than the 1,141 crore that was registered during the June quarter (Q1 FY26)
According to the exchange filing by the company, revenue increased to 13,995 crore up compared to 13,313 crore in the preceding year and 13,351 crore last quarter
The pre-tax profit margin of Tech Mahindra went up to 12.1 which is an improvement by 2.54 percentage points compared to the previous year and it was the 8th successive quarter of profitability growth
The Chief Financial Officer Rohit Anand accredited the growth in margins to be because of better productivity and currency tailwinds
We have now had eight consecutive quarters of growth in profitability. Our margins are still supported by operational efficiency and cost discipline as Anand said
Segment and Market Performance.
Managing Director and CEO Mohit Joshi reported a 2% decrease in revenues in the Americas region that was affected by worldwide macroeconomic uncertainty and low discretionary expenditure
One of the company’s business units, the communications vertical, fell by 2.5%, whereas manufacturing expanded by 5.2% and the business unit of banking, financial services, and insurance (BFSI) increased by 6.5% year-on-year
We are also starting to stabilize though macro conditions are still weak. We anticipate an improvement in growth in the second half of FY26, Joshi added
Good Deal Wins and Business Momentum.
Although the top-line growth was subdued, Tech Mahindra was able to win new deals valued at 816 million in the quarter or 57 percent higher than in the past quarter
The deals were wide-ranged and covering communications, manufacturing, retail, transport, and logistics. According to Joshi, the victories were an indication of renewed client trust in the digital transformation solutions of Tech Mahindra
Dollar Value and Manpower Distribution.
A decrease of 1,559 employees was reported in the company on a year-on-year basis to reach a total headcount of 1.52 lakh as of September 30, 2025. Joshi called the downsizing a marginal one and claimed that Tech Mahindra still selectively involved itself in areas of growth such as AI, automation, and cloud computing
Other income on the other hand also declined drastically to 40 crore versus 522 crore last year. The figure of last year had ₹450 crore one-time capital gains from a sale of a piece of land in Telangana
The board of the company announced that its interim dividend was 15 per share in FY26
Minimal Effect of US Visa Policy.
To curb the anxieties of the US H1-B visa amendments, Joshi explained that less than 1% of the employees present in Tech Mahindra US have H1-B visas, so the reform would have no exhaustive effects to business
The company has the largest market in the Americas which is believed to have contributed approximately 45 percent of its total revenues
Analyst Opinions: Neutral Trend.
There was a difference in opinion among market observers on the quarterly performance of Tech Mahindra:
- Nomura was also optimistic as he said that there is strong deal momentum and a consistent improvement in the three-year turnaround of the company
- CLSA also was optimistic with good margin performance and increased visibility to the FY27 EBIT target of the company at 15%
- Jefferies, though, was careful by pointing out that the wins in deals are good but the losses in foreign exchange are detrimental to profitability. It cautioned that the recovery in the growth of FY27 could still be elusive even when there would be a stronger second half in FY26
Company Overview
Tech Mahindra is a global IT and consulting firm and a joint venture between Mahindra and Mahindra and British Telecom, having been founded in 1986. Tech Mahindra has grown to operate in 90 plus countries globally
The firm focuses on telecommunications, manufacturing, BFSI, retail and logistics clients in terms of IT solutions
With time, British Telecom divested its position, selling the last 9.1 percent of the ownership in December 2012, which has left Tech Mahindra as a one hundred percent ownership of Mahindra Group
Nowadays, Tech Mahindra is characterized by the emphasis on the digital transformation, AI-powered automation, and 5G technology solutions, which makes it one of the major participants in the world of IT services.
Outlook
As the global demand stabilises, Tech Mahindra is making strong deal wins and concentrating on expansion of margin, it seems that Tech Mahindra is implementing the turnaround strategy without any hitch. Nevertheless, the recent macroeconomic uncertainty and low growth in the telecom business can still challenge the growth in the near future
With the company entering the second half of FY26, the investors will be closely monitoring the indications of the accelerated revenue growth and the ability of the company to maintain the margins
