Tech Mahindra posts steady Q3 FY26 growth on AI-led deals

Tech Mahindra on Friday announced its audited consolidated financial results for the quarter ended December 31, 2025, reporting steady revenue growth, a sharp improvement in margins and strong deal momentum amid sustained investments in artificial intelligence-led offerings.

For the quarter, Tech Mahindra reported revenue of USD 1,610 million, up 1.5% quarter on quarter and 2.7% year on year in reported terms. In constant currency terms, revenue rose 1.7% sequentially and 1.3% compared with the same period last year.

Earnings before interest and tax (EBIT) stood at USD 211 million, reflecting a 10.0% sequential increase and a 32.8% rise year on year. EBIT margin improved to 13.1%, expanding by around 100 basis points quarter on quarter and approximately 290 basis points year on year.

Profit after tax (PAT) came in at USD 125 million, an increase of 8.3% year on year. Operational PAT, which excludes exceptional items, rose 27.9% year on year. PAT margin improved to 7.8%, up 40 basis points from a year earlier, while operational PAT margin expanded by around 180 basis points. Free cash flow for the quarter stood at USD 194 million.

New deal wins totalled USD 1,096 million in total contract value (TCV), marking a 47.0% year-on-year increase and a 34.3% rise sequentially.

In rupee terms, revenue for the quarter stood at Rs 14,393 crore, up 2.8% quarter on quarter and 8.3% year on year. EBIT rose to Rs 1,892 crore, an increase of 11.3% sequentially and 40.1% year on year. PAT was reported at Rs 1,122 crore, up 14.1% year on year, while operational PAT increased 34.9%. Diluted earnings per share for the quarter were Rs 12.64.

Operational metrics and balance sheet

Tech Mahindra’s total headcount stood at 149,616 at the end of the quarter, a reduction of 872 employees year on year. Last twelve months (LTM) IT attrition was reported at 12.3%. Days of sales outstanding (DSO) improved to 90 days, reflecting tighter working capital discipline.

Cash and cash equivalents at the end of the quarter were Rs 7,666 crore, underlining the company’s strong liquidity position.

Commenting on the results, Mohit Joshi, Chief Executive Officer and Managing Director of Tech Mahindra, said the company recorded its highest deal wins on a trailing twelve-month basis in the past five years.

He attributed the momentum to sustained investments in sales, a solution-oriented go-to-market strategy and the growing relevance of the company’s AI-led offerings. According to Joshi, these efforts are helping to build a strong foundation for long-term value creation.

Rohit Anand, Chief Financial Officer, said the quarter marked the ninth consecutive period of margin expansion, alongside continued strength in cash generation. He added that a sustained focus on working capital discipline had led to improved cash flows and a meaningful reduction in DSO, keeping the company on track to meet its FY27 targets.

Key deal wins across sectors

During the quarter, Tech Mahindra secured several large, multi-sector engagements. These included a mandate from a leading European telecommunications services provider to modernise applications across CIO and CTO domains, with a focus on innovation, digital resilience and AI-led operational efficiencies.

The company was also selected by a global human capital management software provider to deliver implementation and customer support services across its product portfolio, leveraging its AI, automation and data integration capabilities.

In aerospace, Tech Mahindra was chosen as a strategic partner by a leading European aircraft manufacturer to provide support engineering across all aircraft programmes. In the US, the company secured transformation and system integration engagements with a major communications provider and a healthcare organisation, as well as a mandate from a leading banking institution to modernise its enterprise-wide payments platform with real-time capabilities.

Business and technology highlights

Tech Mahindra continued to deepen its focus on artificial intelligence and next-generation technologies during the quarter. The company partnered with Google to accelerate enterprise adoption of Gemini Enterprise, leveraging Gemini 2.5 multimodal models, and achieved AWS Generative AI Competency status.

It also launched i.GreenFinance, a sustainable lending platform aimed at supporting green and sustainability-linked loans for financial institutions. AI is increasingly being embedded as a core growth and execution engine across large enterprise engagements, with clients moving from pilot projects to scaled, multi-year transformation programmes.

As part of the Indian AI Mission, Tech Mahindra is developing a large language model tailored for education and localising its Orion platform in Hindi to improve accessibility and adoption.

The company signed a memorandum of understanding with The University of Texas at Dallas to advance AI-led innovation, skills development and research, alongside plans to launch its first Makers Lab in the US. Additional collaborations were announced with quantum computing firm Strangeworks, the German Research Center for Artificial Intelligence (DFKI), and supply chain visibility provider Arviem.

Overall, the quarter reflected a combination of disciplined execution, improving profitability and growing relevance of Tech Mahindra’s AI-led strategy across industries and geographies.