Continuous Margin Improvement, Large Deal Rise Reflects Clients' Trust in New Positioning: TechM CEO

•March 9, 2026

ET Telecom (Economic Times)•Mar 9, 2026

Why It Matters

The margin expansion and robust deal pipeline demonstrate that Tech Mahindra’s strategic overhaul is delivering financial discipline and positioning the company to win higher‑value AI and engineering contracts, a decisive edge in the competitive Indian IT services market.

Key Takeaways

•Operating margin rose to 13.1%, up 100 basis points.
•Large‑deal volume jumped 48% year‑over‑year, $1.1bn TCV.
•Vision 2027 roadmap drives portfolio sharpening and unit restructuring.
•Profit fell FY24, but FY27 EPS outlook upgraded.
•Headcount trimmed 3,098, attributed to attrition, not cuts.

Pulse Analysis

The Indian IT services sector has been under pressure from slowing global demand and rising labor costs, prompting firms to seek higher‑margin opportunities such as AI‑driven engineering and telecom modernisation. Tech Mahindra’s recent performance illustrates how a disciplined turnaround can reverse a downward trend. By focusing on AI‑led transformation and restructuring into six strategic business units, the company has sharpened its value proposition and improved execution speed, aligning with the broader industry shift toward enterprise intelligence.

Margin expansion to 13.1% was driven primarily by Project Fortius efficiency gains, which tightened gross margins, and a modest currency tailwind of 20‑30 basis points. The 48% increase in large‑deal volume, reflected in a $1.096 billion total contract value, underscores client confidence in the firm’s refreshed positioning. These large, fixed‑price contracts not only boost top‑line visibility but also enhance profitability, mitigating the impact of FY24 revenue and profit declines.

Looking ahead, the three‑year Vision 2027 roadmap earmarks FY25 as the turnaround phase, FY26 for stabilization, and FY27 for reaping returns. Analysts have already raised FY27 and FY28 EPS forecasts, signalling market optimism. With a stronger pipeline, AI‑centric service offerings, and a leaner workforce, Tech Mahindra is poised to capture a larger share of high‑value digital transformation projects, reinforcing its competitive stance against peers such as TCS and Infosys.