Tech Mahindra has delivered one of its strongest quarterly performances in recent years, reporting a record order book of $1.1 billion in the third quarter of FY26 (October–December 2025). This marks the highest quarterly deal wins for the company in the last five years, signaling a decisive turnaround in business momentum after a prolonged period of muted growth.

The strong order inflow reflects improving global demand conditions, better deal conversion, and the effectiveness of the company’s strategic transformation under its new leadership.

Order Book Growth Signals Revival in Client Confidence

During Q3 FY26, Tech Mahindra secured large, medium, and small-sized contracts across multiple industries and geographies. The deal momentum was broad-based, with notable strength in:

Communications and telecom services

Manufacturing and industrial solutions

Retail and consumer businesses

Healthcare and high-technology segments

A key highlight of the quarter was a large telecom deal from a European client, reinforcing Tech Mahindra’s long-standing dominance in the communications vertical. The company stated that its Q3 order wins were significantly higher both year-on-year and sequentially, underscoring a clear improvement in its deal pipeline.

This surge in new contracts is particularly significant given the cautious IT spending environment globally, where enterprises continue to prioritise cost efficiency and selective digital investments.

Revenue and Profitability Show Steady Improvement

Tech Mahindra’s financial performance in Q3 reflected the benefits of improved execution and operational discipline.

Net profit rose to ₹1,122 crore, registering a double-digit year-on-year growth

Revenue from operations increased to ₹14,393 crore, supported by deal ramp-ups and steady client spending

Operating profit (EBIT) grew sharply, leading to an operating margin expansion to around 13.1%

The margin improvement was driven by cost optimisation initiatives, better utilisation rates, and disciplined pricing strategies. However, on a quarter-on-quarter basis, profit was impacted by one-time costs related to labour code implementation in India, which slightly weighed on earnings.

Despite this, analysts view the margin expansion as a positive structural trend for the company.

Geographic Performance: Europe Emerges as Key Growth Driver

From a regional perspective:

Europe delivered strong growth, supported by large deal wins and telecom contracts

Americas, Tech Mahindra’s largest revenue contributor, remained stable amid cautious enterprise spending

India and Rest of the World markets showed selective growth in manufacturing and digital services

The strong performance in Europe is especially encouraging, as it reflects Tech Mahindra’s ability to win complex, high-value deals in competitive markets.

Segment-Wise Trends

The communications segment continued to be the largest contributor to revenue, benefiting from network modernisation and digital transformation deals

Manufacturing and retail showed steady recovery, aided by demand for automation, cloud, and data analytics

BFSI and media segments remained under pressure, consistent with industry-wide softness

Management indicated that diversification beyond telecom remains a strategic priority to ensure balanced long-term growth.

Workforce and Operational Efficiency

At the end of Q3, Tech Mahindra’s total workforce stood at approximately 1.5 lakh employees. The company reported:

Moderation in employee attrition, indicating better workforce stability

Continued focus on reskilling and redeployment to align talent with emerging digital technologies such as AI, cloud, and cybersecurity

These measures are aimed at improving delivery efficiency and supporting margin expansion.

Management Commentary and Strategic Direction

CEO & MD Mohit Joshi stated that the strong Q3 order book demonstrates increasing confidence from global clients in Tech Mahindra’s delivery capabilities. He emphasised that the company is focusing on:

Profitable growth over aggressive volume expansion

Strengthening client relationships through long-term, value-driven contracts

Improving execution discipline and cost management

The management reiterated its commitment to achieving sustainable margin improvement and competitive growth over the medium term.

Industry Context and Future Outlook

The global IT services industry continues to navigate challenges such as economic uncertainty, cautious IT budgets, and pricing pressure. However, Tech Mahindra’s Q3 performance suggests that deal activity is gradually picking up, especially in areas like:

Digital transformation

Cloud migration

AI-led enterprise solutions

Network and telecom modernisation

With a strong order book providing revenue visibility for the coming quarters, Tech Mahindra appears well-positioned to capitalise on a gradual recovery in IT spending.