Business

IIE DIGITAL DESK : April 22: IT services major Tech Mahindra delivered a stronger-than-expected performance in the fourth quarter of FY26, reporting a sharp sequential rise in profitability and steady revenue growth, supported by robust deal wins and improving operational efficiency.

The company posted a consolidated net profit of ₹1,353.8 crore for the January–March quarter, marking a 20.7% increase over the previous quarter. However, the result came slightly below market expectations, as a CNBC TV18 poll had estimated a higher sequential profit of ₹1,504 crore, indicating a modest miss on earnings forecasts despite solid underlying growth.

Revenue from operations for the quarter rose 4.7% sequentially to ₹15,076.1 crore, surpassing analyst estimates of ₹14,804 crore. The better-than-expected revenue performance reflected improved client spending and stronger execution across key business segments, including telecom, banking, manufacturing, and energy.

The operating level, earnings before interest and tax (EBIT) stood at ₹2,084 crore, registering a 10.2% quarter-on-quarter increase and a 48.3% year-on-year jump. The EBIT margin improved to 13.8%, highlighting enhanced operational efficiency and cost discipline. Profit after tax grew 16% year-on-year, while earnings per share came in at ₹15.24.

The board also approved a final dividend of ₹36 per equity share for FY26, taking the total dividend for the financial year to ₹51 per share, including the interim payout, signalling strong shareholder returns backed by healthy cash generation.

On the business front, Tech Mahindra reported sustained deal momentum, with total deal wins remaining above the $1 billion mark for consecutive quarters. The company said it secured multiple large, multi-year contracts across major sectors, including telecom, banking, manufacturing and energy, with a strong emphasis on AI-led transformation and managed services engagements.

Management highlighted the company’s ongoing transition towards an AI-driven operating model, with artificial intelligence increasingly integrated across service lines and delivery platforms. This shift, according to the company, is improving automation-led efficiency, enhancing productivity, and supporting its move towards higher-margin digital services.

Operational metrics remained stable, with total headcount at 1,47,623 at the end of the quarter and attrition holding steady at 12.1%. The company’s cash and cash equivalents stood at ₹8,456 crore, providing a strong liquidity position for future investments and shareholder returns.

Following the earnings announcement, Tech Mahindra shares witnessed volatility but recovered from intraday lows, briefly rebounding up to 7% before closing lower. The stock was last seen trading around ₹1,464 in late afternoon trade, down approximately 2.5%, as investors weighed earnings performance against market expectations.