Tech Mahindra Q1FY26 Result Analysis

Tech Mahindra is one a global leader in technology consulting and digital transformation, enabling enterprises to scale innovation rapidly and efficiently. With 148,000+ professionals across 90+ countries, the company serves over 1,100 clients worldwide. Its service offerings span IT and enterprise applications, business process services, engineering, networks, customer experience and design, AI and analytics, and cloud and infrastructure. Tech Mahindra is the first Indian company to receive the Sustainable Markets Initiative’s Terra Carta Seal, recognizing its efforts in advancing a climate- and nature-positive future.

Backend Editor

Result Analysis:  Tech Mahindra  (CMP: Rs. 1,577)

Result Update: Q1FY26

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Financial Performance:

Shareholding Pattern:

Particulars (In %)	Q4FY25	Q4FY24
Promoters Group	35.01	35.09
FIIs	23.94	25.16
DIIs	31.12	29.53
Public & Others	8.77	10.06
Government	0.17	0.17

Management Commentary:

• This marks the seventh straight quarter of margin expansion, indicating ongoing improvement in operational discipline and revenue mix.
• Demand remains uneven across verticals. Manufacturing and high-tech sectors face discretionary spend cuts due to tariffs and restructuring, while telecom and BFSI are showing signs of stabilization. Despite macro uncertainty, Tech Mahindra expects improvement in large deal conversions to revenue starting Q2, barring any major disruptions.
• Tech Mahindra aims to reach its 15% EBIT margin target by FY27, leveraging higher offshore mix, improved fixed-price productivity, and tighter contract governance, supported by integration of acquisitions and assuming stable macro conditions.
• Receivables increased in Q1 due to timing issues in select geographies and typical seasonal patterns. Management confirmed that collections have improved in July, and the balance should normalize by Q2 FY26, minimizing concerns around working capital efficiency.

Outlook:

Tech Mahindra delivered flat financial performance in Q1FY26, impacted by ongoing geopolitical and tariff-related pressures. The attrition rate rose to 12.6%, and revenue from the Americas declined. The telecommunications vertical remained the largest revenue contributor, with management indicating increased strategic focus on this segment. Notably, the company posted its seventh consecutive quarter of margin expansion, reflecting improved operational discipline and a favourable revenue mix. Tech Mahindra has reiterated its EBIT margin target of 15% by FY27 and expressed greater confidence in performance improvement from Q2FY26 onward. The Company reported an EPS of Rs 12.86 in Q1FY26 and TTM EPS of Rs 51.26 and currently trading at a TTM P/E of 30.76x and P/B of 5.63 x.

Results:

 

Source: Company website, EWL Research

 

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