Tech Mahindra posts higher FY26 revenue & record dividend

Tech Mahindra reported higher annual revenue and a sharp rise in EBIT for FY26, and declared its highest annual dividend to date.

Annual revenue reached USD 6,385 million, up 1.9% in reported terms and 0.6% in constant currency. EBIT rose 31.4% year on year to USD 797 million, while profit after tax increased 7% to USD 537 million.

In rupee terms, revenue was ₹56,815 crores, up 7.2%, and EBIT climbed 39.2% to ₹7,152 crores. Profit after tax rose 13.2% to ₹4,811 crores.

For the fourth quarter, revenue stood at USD 1,625 million, up 0.9% from the previous quarter and 4.9% from a year earlier in reported terms. Quarterly EBIT rose to USD 223 million, up 5.5% sequentially and 36.3% year on year, taking EBIT margin to 13.8%.

The board declared a final dividend of ₹36 per share, taking total dividends for the year to ₹51 per share. This was an increase of more than 13% and the company's highest annual payout.

Deal pipeline

New deal wins reached USD 3,794 million for the year, up 41.6% from the previous year. In the fourth quarter, total contract value for new deal wins was USD 1,073 million, up 34.5% year on year, though down 2.1% from the prior quarter.

Several larger wins came from Europe and North America, including a multi-year transformation and outsourcing agreement with a European telecommunications operator, a managed services mandate from a European retail bank, and an application development and support engagement with a North American automotive manufacturer.

Tech Mahindra was also selected by a global public health alliance for a managed services engagement and by a Fortune 500 energy group to run infrastructure, cloud, service desk, and end-user computing services.

These contracts indicate traction in the telecommunications, financial services, healthcare, and industrial sectors as clients continue to review their operating models and technology estates.

Margins expand

The quarter marked the 10th consecutive quarter of margin expansion. Annual EBIT margin stood at 12.6%, up 290 basis points year on year.

Free cash flow for the year was USD 616 million. Cash and cash equivalents at the end of the quarter were ₹8,456 crores, while the days' sales outstanding were 89 days.

Headcount at the end of the quarter was 147,623, down 1,108 from a year earlier. Last 12-month IT attrition was 12.1%.

Management attributed the stronger profitability to an ongoing internal transformation effort and tighter capital allocation. It described FY26 as the end of the stabilisation phase of that work.

"We are accelerating our transition to an AI-led organisation, embedding AI across services and expanding our capabilities to enhance value delivery for our clients. This is reflected in our highest deal wins in recent years including consecutive quarters exceeding $1 billion. We remain focused on scaling with discipline and are on track to delivering our FY27 commitments," said Mohit Joshi, Chief Executive Officer and Managing Director, Tech Mahindra.

The company has also added new products and partnerships tied to artificial intelligence, particularly in telecoms and data operations. During the period, it launched an Agentic Payment Assistance & Collections Optimisation Solution for telecoms operators and introduced an education-focused large language model aimed at Hindi-language use cases.

It also announced collaborations with Microsoft, NVIDIA, Fortinet, FICO, SCSK Asia Pacific, and Rubrik across data modernisation, network operations, cyber recovery, and analytics.

"FY26 marked the end of the Stabilization Phase of our transformation journey, with margins expanding for the 10th consecutive quarter despite a challenging macro environment. In line with our disciplined capital allocation framework and commitment to our shareholders, we increased the dividend by over 13%, taking total dividends declared for the year to ₹51 per share, our highest ever," Rohit Anand, Chief Financial Officer, Tech Mahindra, said.