Tech Mahindra Q4 Preview: Profit Seen Jumping As Margin Improves

Tech Mahindra is expected to report modest sequential growth in the March quarter, with margins seen improving on cost actions and currency support, while profit is projected to rise sharply from a low base. The company is scheduled to announce its results on Wednesday.

Bloomberg estimates indicate revenue may rise 3% quarter-on-quarter, while EBIT is seen up 6% and profit up 35%. EBIT margin is expected to improve to 13.54% from 13.14% in the previous quarter. Constant currency growth is projected at 0.71% sequentially and 0.65% year-on-year. Trailing 12-month attrition is seen at 12.61%.

Tech Mahindra Q4 Preview Key Highlights (QoQ, Bloomberg Estimates)

• Revenue seen 3% higher at Rs 14,784 crore versus Rs 14,393 crore
• EBIT seen 6% higher at Rs 2,003 crore versus Rs 1,892 crore
• EBIT margin seen at 13.54% versus 13.14%
• Profit seen 35% higher at Rs 1,511 crore versus Rs 1,122 crore

The March quarter is expected to show continued progress in Tech Mahindra's turnaround, with deal ramp-ups and operating efficiencies supporting earnings even as execution delays in select projects and weakness in parts of BFSI remain watchpoints. Investors will focus on the next phase of growth targets, demand trends in communications and enterprise, margin reinvestment choices, and commentary on artificial intelligence-led opportunities.

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Here's what analysts expects from Tech Mahindra Q4 results

DAM Capital

• Expects Q4 growth of about 1%-1.5% quarter-on-quarter in constant currency, slower than the recent run rate due to delays in execution of the CBDT deal.
• All verticals except BFSI expected to post positive growth.
• Hi-tech expected to turn positive, manufacturing seen positive with some Middle East weakness, and healthcare supported by a large deal pipeline.
• BFSI impacted by a top client in the segment.
• Deal wins expected at $1.5-1.6 billion, with pipeline remaining strong.
• Margins expected to decline by about 100 basis points due to wage hikes.
• Key focus areas include CBDT timeline, BFSI recovery, Middle East impact and next-year growth guidance.

Kotak Institutional Equities

• Forecasts flat revenue for the quarter after a prior-quarter manufacturing pull-forward benefit normalises.
• EBIT margin expected to expand by about 60 basis points, supported by efficiencies and currency benefits.
• Net profit growth expected to remain muted due to foreign exchange loss.
• Net new deal wins expected at $1.1 billion.
• Focus areas include medium-term targets, margin reinvestment versus growth, BFSI recovery, profitability of large deals and hedging strategy.

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Jefferies

• Revenue expected to grow 0.7% quarter-on-quarter in constant currency, aided by large deal ramp-up.
• Margins expected to expand by about 70 basis points due to currency benefits and cost efficiencies, partly offset by transition costs.
• Deal wins expected in the $1.0-1.2 billion range, supported by a communications mega deal.
• Focus on three-year plan, communications and BFSI growth, calendar year 2026 budgets, margin levers and wage hike cycle.

Citi

• Expects revenue growth of about 0.1% quarter-on-quarter in constant currency.
• Margins likely to improve by about 90 basis points on currency support and continued cost optimisation.
• Deal total contract value expected around $1 billion.
• Focus areas include communications and enterprise growth outlook, margin trajectory and deal wins.

Goldman Sachs

• Expects Q4 revenue growth to slow due to Middle East exposure, project ramp-up delays and productivity pass-through.
• Strong growth in other verticals expected to partly offset these pressures.
• EBIT margins expected to be impacted by wage hikes and higher selling, general and administrative costs.

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