Tech Mahindra (TECHM) Q1 26/27 earnings summary

Executive summary

• Achieved Q1 FY27 revenue of $1.66B (Rs. 157,119 million), up 6.1% YoY, with 14.4% operating margin and 9.3% PAT margin, marking the 11th consecutive quarter of margin expansion.

• Large deal wins totaled $1.078B, up 33.3% YoY, with the $50M+ client base expanding by seven YoY and significant contributions from manufacturing and healthcare.

• Growth was broad-based across all key verticals, with manufacturing, BFSI, healthcare, and retail/travel/logistics delivering solid YoY gains.

• Continued investments in AI, platforms, and talent, with strategic acquisitions and partnerships, including the acquisition of Avant Techno Solutions.

• Recognized for sustainability and industry leadership, including TIME's most sustainable Indian company and 2026 Google Cloud Partner of the Year in Manufacturing.

Financial highlights

• Revenue: $1.66B (Rs. 157,119 million), up 6.1% YoY and 2.2% QoQ; constant currency growth 6.6% YoY.

• Operating/EBIT margin: 14.4%, up 60 bps QoQ and 330 bps YoY; PAT margin at 9.3%, up 80 bps YoY.

• Profit after tax: INR 14,863 million (consolidated), up from INR 11,288 million YoY; free cash flow: $167M, up 94% YoY.

• Free cash flow to PAT ratio reached 108%; DSO improved to 84 days.

• ROCE: 28.3%, up 210 bps QoQ and 450 bps YoY; cash and cash equivalents at $1,026M.

Outlook and guidance

• Confident of sustaining growth momentum for FY27, aiming to exceed peer average growth and achieve 15% operating margin.

• Focus on integrating acquisitions, adapting to regulatory changes, and phased wage increases in Q2.

• Large deal ramp-ups and a healthy order book expected to drive continued growth, barring unforeseen macroeconomic events.

• Management emphasizes operational rigor and investments in differentiated capabilities and AI.