Tech Mahindra Q3 FY26: Operational Resilience & Margin Expansion

Executive Summary Tech Mahindra Ltd. delivered a resilient operational performance in Q3 FY26, characterized by robust revenue growth and significant margin expansion that surpassed consensus estimates. While Net Profit faced headwinds, the company demonstrated strong underlying business momentum with highest LTM deal wins in five years and a beat on constant currency growth. Key Financial Highlights Revenue Performance: Reported revenue stood at ₹14,393 crore, growing 2.8% YoY and surpassing the street estimate of ₹14,209 crore. In dollar terms, revenue reached $1,610 million (+1.5% YoY), driven by a constant currency growth of 1.7%, which significantly outperformed the projected 0.6%. Profitability & Margins: EBIT: Earnings Before Interest and Taxes rose 11.3% YoY to ₹1,891.6 crore, beating the estimate of ₹1,804 crore. Operating Margin: Margins expanded to 13.1% (up from 12.1% YoY), marking the ninth consecutive quarter of expansion—a testament to rigorous cost discipline and operational efficiency. Net Profit: PAT stood at ₹1,122 crore, a decline of 6% YoY, missing the poll estimate of ₹1,385 crore. EPS: Diluted Earnings Per Share for the quarter was reported at ₹12.64. Strategic & Operational Metrics Deal Momentum: The company secured new deal wins with a Total Contract Value (TCV) of $1,096 million. This represents a substantial growth of 47.0% YoY and 34.3% QoQ, signaling renewed client confidence and traction in AI-led offerings. Cash Flow: Strong working capital discipline yielded a Free Cash Flow (FCF) of $194 million. Cash and cash equivalents stood healthy at ₹7,666 crore, with Days Sales Outstanding (DSO) improving to 90 days. Human Capital: LTM IT attrition remained stable at 12.3%. The total headcount was reported at 149,616, reflecting a slight YoY optimization of 872 employees.