Tech Mahindra Stock Rallies 3% After Strong Q1. Should Investors Buy Now?

Tech Mahindra Q1 Results FY27: Tech Mahindra reported a strong start to FY27, delivering double-digit growth in revenue, profitability, and operating margins while maintaining strong deal momentum. The IT services major posted a 28.4% year-on-year increase in net profit, 53.3% growth in EBIT, and secured new deal wins worth $1.08 billion, marking the third consecutive quarter of crossing the $1 billion milestone. The company's continued focus on AI-led transformation, cloud, engineering services, and digital modernization helped drive broad-based growth across verticals.

Tech Mahindra Q1 FY27: Key Financial Highlights

Metric	Q1 FY27	YoY Growth
Revenue	₹15,712 crore	17.7%
EBIT	₹2,264 crore	53.3%
EBIT Margin	14.4%	+330 bps
Net Profit (PAT)	₹1,465 crore	28.4%
EPS	₹16.50	Higher YoY
Free Cash Flow	$167 million	Healthy
New Deal Wins (TCV)	$1.078 billion	33.3%
Cash & Cash Equivalents	₹9,695 crore	Strong Balance Sheet

Revenue and Margins Continue to Improve

Tech Mahindra reported ₹15,712 crore in consolidated revenue during the June quarter, reflecting 17.7% year-on-year and 4.2% sequential growth. Operating performance improved significantly as EBIT climbed to ₹2,264 crore, while the EBIT margin expanded to 14.4%, supported by better execution, disciplined cost management, and an improved business mix.

The company also generated $167 million in free cash flow, highlighting healthy cash generation and operational efficiency.

USD Performance Snapshot

Metric	Q1 FY27	YoY Growth
Revenue	$1.66 billion	6.1%
EBIT	$238 million	38.6%
EBIT Margin	14.4%	+330 bps
PAT	$154 million	16.2%
Deal Wins	$1.078 billion	33.3%

AI, Cloud and Digital Transformation Drive Growth

Tech Mahindra continued strengthening its position in enterprise AI and digital transformation during the quarter. The company launched Agentic Development & Modernization Services, aimed at helping enterprises modernize application development using AI-powered automation.

It also expanded partnerships with Microsoft, Cisco, Perplexity, Telefónica Germany, UKG, Workday, Kitsa, and StackGen, reinforcing its capabilities across cloud infrastructure, cybersecurity, AI, telecom, healthcare, workforce transformation, and enterprise software.

In addition, Tech Mahindra completed the acquisition of Avant Techno Solutions, enhancing its capabilities in payments modernization and wealth management platforms within the BFSI sector.

Deal Pipeline Remains Strong

The company secured $1.078 billion in new Total Contract Value (TCV) during Q1 FY27, representing 33.3% year-on-year growth.

Major wins included projects across:

• Global payments technology
• US healthcare systems
• Aerospace & defence
• Industrial manufacturing
• Telecom operators in New Zealand and Africa
• Autonomous driving technology
• Specialty chemicals
• Cloud infrastructure modernization

These large deals strengthen revenue visibility for the coming quarters.

Operational Highlights

Operational Metric	Q1 FY27
Total Employees	146,760
Net Headcount Change	-863 QoQ
IT Attrition	11.8%
Days Sales Outstanding	84 Days
Cash Position	₹9,695 crore

While headcount declined marginally during the quarter, attrition remained stable, reflecting disciplined workforce optimization amid improving productivity.

Management Commentary

Mohit Joshi, CEO & Managing Director, said the company's consistent revenue growth and three consecutive quarters of billion-dollar deal wins demonstrate the strength of Tech Mahindra's strategy and the growing demand for its AI-led digital transformation offerings.

Rohit Anand, Chief Financial Officer, highlighted that margin expansion, disciplined execution, and strong working capital management contributed to the robust quarterly performance. He added that the company will continue investing in sovereign AI, domain-specific AI, cloud platforms, engineering capabilities, and talent to support long-term growth.

Industry Recognition

During the quarter, Tech Mahindra continued receiving global recognition for technology leadership and sustainability, including:

• Ranked among TIME's World's Most Sustainable Companies 2026
• Recognized as India's No.1 sustainable company
• Received Gold EcoVadis Sustainability Rating
• Named a Leader in multiple ISG Provider Lens, IDC MarketScape, Everest Group PEAK Matrix, and NelsonHall NEAT reports across cybersecurity, cloud, AI, insurance, semiconductor, SAP, and network services.

What Investors Should Watch

Key Focus Area	Why It Matters
AI Business Growth	Expanding enterprise AI opportunities
Large Deal Execution	Revenue visibility over coming quarters
Margin Expansion	Improving profitability
Cloud & Engineering Business	High-growth digital segments
BFSI & Telecom Demand	Core revenue drivers
Free Cash Flow	Financial strength
Future Guidance	FY27 growth outlook

Outlook

Tech Mahindra has delivered one of its strongest quarterly performances in recent years, supported by healthy revenue growth, expanding margins, robust profitability, and sustained large deal wins. The company's continued investments in artificial intelligence, cloud computing, cybersecurity, engineering services, and digital transformation position it well to benefit from rising global technology spending.

With three consecutive quarters of over $1 billion in deal wins, improving operating efficiency, and a strong enterprise AI strategy, Tech Mahindra appears well-positioned for sustained growth through FY27, although macroeconomic conditions and global IT spending trends will remain important factors to watch.

How much profit did Tech Mahindra report in Q1 FY27?

Tech Mahindra reported a consolidated net profit of ₹1,465 crore, up 28.4% year-on-year.

How much revenue did Tech Mahindra generate in Q1 FY27?

The company reported ₹15,712 crore in revenue, representing 17.7% YoY growth.

How much were Tech Mahindra's new deal wins?

The company secured $1.078 billion in new deal wins during the June quarter, up 33.3% YoY.

What drove Tech Mahindra's Q1 performance?

Growth was driven by enterprise AI adoption, cloud transformation, engineering services, telecom projects, large global deal wins, and improved operational efficiency.

What is Tech Mahindra's outlook for FY27?

The company expects continued growth supported by AI-led transformation, cloud services, engineering, cybersecurity, strong deal execution, and strategic global partnerships.