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Having steadied the ship in FY25 (see here), Tech Mahindra inched further forward in the first quarter of the new fiscal year. Firm-wide revenue increased by 0.4% yoy during the three months ended 30th June to $1.56bn with the associated EBIT margin improving by 260 bps against Q125 to 11.1%.
The forward momentum in the company’s European region, which began to build during the latter part of the previous FY, gained strength during the latest quarter. Turnover in the geography was up 11.1% yoy in Q126 to $407m. This performance largely offset the c.6% drop in Tech Mahindra’s sales in the Americas, albeit a qoq improvement of c.2.7% indicates that of this geography has turned a corner after three consecutive quarters of sequential top line decline.
There was positive news from Tech Mahindra’s largest industry sector unit. The company’s Communications vertical, which generates around a third of firm-wide turnover and had shrunk in FY25, returned to growth in Q1 with revenues up by 2.5% yoy at c.$530m. The first three months of FY26 also saw a notable increase the company’s deal wins with the TCV closed up by over a half on Q125 at $809m. The latest batch of signings included a significant Business Process Services contract with a UK manufacturer.
No forward guidance was provided for either the current quarter or the remainder of FY26. It does appear, however, that Tech Mahindra’s performance is gradually improving. As TCS's latest results clearly illustrate (see here), remaining in positive growth territory in the face of the prevailing market headwinds is no small achievement for any services supplier.
Posted by: Duncan Aitchison at 09:06
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