Tech Mahindra (TECHM) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue was $1,586 million, up 1.4% sequentially and down 0.2% year-over-year; EBIT margin at 12.1% and PAT margin at 8.5%.

• Free cash flow reached $237 million, with FCF to PAT conversion at 176%.

• New deal wins totaled $816 million, with LTM deal TCV up 57% year-over-year.

• Launched TechM Orion and TechMRI, next-generation AI platforms, and TechM Orion Marketplace to accelerate enterprise AI adoption.

• Interim dividend of INR 15 per share declared; board maintains policy of returning 85%+ of free cash flow to shareholders.

Financial highlights

• USD revenue up 1.4% QoQ and down 0.2% YoY; INR revenue up 4.8% QoQ and 5.1% YoY.

• EBIT at $192 million, margin at 12.1%, up 108 bps QoQ; PAT at $135 million, margin at 8.5%.

• Free cash flow for the quarter was $237 million; FCF to PAT ratio at 176%.

• ROCE reached 24.4% for the quarter.

• Cash and cash equivalents at quarter-end were $821 million (₹7,287 crore).

Outlook and guidance

• Management expects continued margin expansion driven by operational efficiency and disciplined execution.

• Growth for FY27 anticipated to be higher than FY26, though industry growth expectations are now more muted.

• Targeting net new deal wins closer to $1 billion per quarter to support growth ambitions.

• Focus remains on scaling AI-led solutions and digital transformation for clients.

• Expectation of improved performance in the second half of the year, driven by operational efficiencies and better demand visibility.