Tech Mahindra shares fall over 2% post Q1 earnings; here is the fine print

The market participants were cautious after the company’s revenue in constant currency (CC) terms dipped 1.4% sequentially and 1% YoY.

Tech Mahindra’ technology, media, and entertainment vertical has dropped 3.3% due to ongoing restructuring and steep budget cuts at one of the company's semiconductor industry clients.

Geographically, the company's European business grew by 11.7%, while the Americas declined by 5%. The rest of the world registered a 2.9% increase in business.

"The macro picture is still quite hazy... In certain sectors that have been impacted by tariffs and by demand activity, like auto, I think the sentiment is still not conducive to significant stationary investments. In some other sectors, like telecom, for instance, we have seen a stabilisation and growth in this quarter, which we expect will continue. For hi-tech, we expect a recovery certainly in the second half of the year," said Mohit Joshi, CEO and Managing Director of Tech Mahindra.

Joshi indicated an expectation of a gradual recovery in the hi-tech business in the second half of the year.

Shares of Tech Mahindra settled at ₹1,564.20 apiece on the National Stock Exchange, declining 2.72%. The stock had touched an intraday low of ₹1,560.90 per share. It was the top laggard on the 50-share index on Thursday.

Tech Mahindra on Wednesday reported a 34% year-on-year (YoY) surge in its consolidated net profit, which stood at ₹1,140.6 crore in the first quarter of FY26. In the corresponding period last year, it was at ₹851.5 crore.

The Pune-headquartered firm's revenue from operations stood at ₹13,351 crore in the quarter under review, jumping 2.7% YoY from ₹13,005 crore in the June quarter of FY25.

In Q1FY26, Tech Mahindra earned a revenue of ₹11,263.7 crore from its IT segment, up 3.55% YoY from ₹10,878 crore in the same period last year. However, its Business Process Services (BPS) revenue fell 1.88% YoY to ₹2,087.5 crore, as against ₹2,127.5 crore.

At an operational level, its EBIT (earnings before interest and tax) improved by 34% YoY to ₹1,477 crores in Q1FY26.

Various brokerages and analysts have revised their outlook for the firm as well.

The tech company's total headcount increased by 897 YoY to 1.48 lakh during the quarter.

Tech Mahindra’s total contract value (TCV) for the quarter was $809 million, compared to $534 million in Q1FY25.

Commenting on the Q1 results, Mohit Joshi, CEO and Managing Director, Tech Mahindra, said, “Our performance is steadily strengthening, reflecting disciplined execution and a focused strategy. Deal wins have increased by 44% on a last twelve months (LTM) basis, supported by broad-based momentum across verticals and geographies.”