Tech Mahindra reported Q3 FY26 profit after tax of ₹1,122 crore, up 14.1% year-on-year.
The communications segment emerged as a key growth driver during the quarter, supporting overall performance.
Sequentially, net profit fell 6.07% due to a one-time exceptional charge of ₹272.4 crore related to the implementation of the new labour code.
IT major Tech Mahindra on Friday reported profit after tax (PAT) of ₹1,122 crore for the quarter ending December 2025, up 14.1% year on year. The company’s CEO Mohit Joshi said it saw “signs of stability across the US”, with the communications vertical emerging as a “growth vertical” for the firm.
However, on a sequential basis, net profit declined by 6.07% due to a one-time exceptional cost of ₹272.4 crore linked to the implementation of the new labour code. This included higher gratuity liabilities from past service costs and an increase in leave-related liabilities.
1 January 2026
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Tech Mahindra reported revenue of ₹14,393 crore in the third quarter of the financial year 2025–26 (FY26), marking a 2.8% rise quarter-on-quarter and an 8.3% increase year-on-year. Earnings before interest and tax (EBIT) stood at ₹1,892 crore, up 11.3% sequentially and 40.1% from a year earlier.
In dollar terms, revenue came in at $1,610 million, up 1.5% quarter-on-quarter and 2.7% year-on-year on a reported basis. In constant currency terms, revenue grew 1.7% sequentially and 1.3% annually. EBIT margin improved to 13.1%, expanding by about 100 basis points sequentially and nearly 290 basis points from last year.
Profit after tax (PAT) was $125 million, up 8.3% year-on-year, while operational PAT grew a stronger 27.9%. PAT margin stood at 7.8%, higher by 40 basis points year-on-year, with operational PAT margin improving by around 180 basis points. Free cash flow during the quarter was $194 million. New deal wins remained strong, with total contract value (TCV) at $1,096 million, up 47.0% year-on-year and 34.3% quarter-on-quarter.
“Our deal wins on an LTM basis are the highest we have achieved in the past five years, reflecting an improved deal-win run rate over the past several quarters. The momentum is a testament to our sustained investments in sales, a solution-oriented go-to-market approach and the growing relevance of our AI-led offerings in addressing client needs,” said Joshi.
Ahead of the Q3 results announcement, Tech Mahindra shares rose 5.17% to ₹1,670.55 on the BSE.
In the third quarter of FY26, the communications vertical remained Tech Mahindra’s largest segment, accounting for 33.1% of revenue, with growth of 2.8% quarter-on-quarter and 4.7% year-on-year. Manufacturing contributed 18.3% and posted solid growth of 2.2% sequentially and 11.7% annually, while BFSI, which made up 15.5% of the mix, saw a decline of 6.2% quarter-on-quarter and 0.8% year-on-year. The technology, media and entertainment vertical accounted for 13.2% of revenue, growing 3.0% sequentially but declining 4.6% on a yearly basis.
Retail, logistics and transport, at 8.7% of the mix, delivered strong growth of 4.0% quarter-on-quarter and 11.7% year-on-year, while healthcare and life sciences contributed 7.4%, with a 3.0% sequential increase but a marginal 0.4% year-on-year decline. The remaining segments accounted for 3.7% of revenue, rising 7.6% sequentially but falling sharply by 19.4% year-on-year.
Geographically, the Americas continued to dominate with a 50.6% share of revenue, growing 3.1% quarter-on-quarter and 2.1% year-on-year. Europe accounted for 25.6% of revenue and recorded growth of 2.2% sequentially and a strong 11.2% year-on-year increase, while the rest of the world (ROW), which contributed 23.9%, saw a decline of 2.3% quarter-on-quarter and 4.0% year-on-year.
“This quarter reflects a well-rounded financial performance, marked by a ninth consecutive quarter of margin expansion and continued strength in cash generation. A sustained focus on working capital discipline has led to improved cash flows and a meaningful improvement in DSO, driven by consistent execution. We remain on track in our progress towards our FY27 goals,” said Rohit Anand, Chief Financial Officer, Tech Mahindra.
However, by the end of December 2025, the Pune-headquartered firm saw its overall headcount decline by 872 year-on-year to 149,616. In the IT segment, the firm had 4,671 fewer employees compared with the same quarter last year. Its LTM IT attrition during the quarter stood at 12.3%.
