Tech Mahindra Q1 Results LIVE | Earnings, Management Commentary & Press Conference

And the actions that we've taken over the past 2 years. We have delivered margin expansion consistently over the past 2 years. More recently, our growth has begun to move ahead of the peer average. We had said that in the third year of the transformation that we would pivot strongly to growth and as the numbers today show, we have done just that. For the quarter, we have reported revenues of US dollars 1.66 billion, representing a 6.1% year-on-year growth on a reported basis and 6.6% growth in constant currency. This performance reflects continued momentum across the business, broad-based growth across our key verticals, progress in our AI-led strategy, and very strong client engagement across markets. Operating margins stood at 14.4%. This reflects the sustained execution discipline, the operational rigor, and the continuous focus we had on profitable growth. Let me now turn to performance across our key verticals. Our communications vertical grew by 1.3% year-on-year. The vertical continued to benefit from stability in key accounts, sustained client engagement, and the ramp-up of large deals secured over the last few quarters. Our communications experience center in Pune is strengthening the way we engage with clients. The center demonstrations, integrated solutions, and industry-specific use cases in one environment. The banking and financial services sector for us grew 8.1% year-on-year. We continue to see healthy demands in areas like payments modernization, wealth platforms, regulatory compliance, identity and access management, and AI-led transformation. During the quarter, we also announced the acquisition of Avant Techno Solutions, a Canadian-based firm specializing in payments, modernization, and wealth platforms. The acquisition is aligned with our stated strategy of deepening our presence in payments and the wealth segment, which we have consistently identified as important growth areas. It also strengthens our position in a structurally high-growth segment of financial services. The manufacturing sector for us grew 17.2% year-on-year. Our focus remains on scaling sustainable growth across aerospace, industrial, and process manufacturing. We continue to see strong client interest in intelligent, data-driven operations that bring together AI, data platforms, engineering, and enterprise systems at scale. Retail, travel, and logistics grew 8.6% year-on-year, supported by momentum across e-commerce expansion, logistics modernization, automation, warehousing, and last-mile delivery optimization. We are bringing together our digital, data engineering, and experience capabilities to help our clients improve efficiency and customer engagement across the value chain. Our healthcare business grew 7.2% year-on-year, supported by momentum across providers and life sciences. We are seeing opportunities in vendor consolidation and AI-led discretionary spend. Our AI solutions catalog, developed in partnership with the hyperscalers and other ecosystem partners, is helping us win new clients and take differentiated solutions to existing clients. Overall, every vertical delivered year-on-year growth during the quarter. Based on our pipeline and the ramp-up of recent deal wins, we expect this positive momentum will continue, subject, of course, to the broader macroeconomic environment.

Very encouraging for us is the continued deepening of client relationships. The number of clients generating for us more than $50 million in revenue increased by seven year-on-year, reflecting the trust our clients place in us and our ability to expand strategically within our key accounts. Another important area of progress during the quarter was Tech M Helix, which represents the next phase of our AI link transformation. Brings together our platforms, our talent partnerships, and our innovation efforts to help clients adopt AI at scale. A key milestone in this has been the launch of our AgentiCS development and modernization services portfolio. This next-gen offering is designed to help enterprises reimagine how applications are built, modernized, and operated. By embedding AgentiCS AI across the application life cycle, this portfolio enables clients to accelerate their transition towards AI-led autonomous enterprise ecosystems. Alongside this, we continue to scale our AgentiCS AI platform ecosystem led by Tech M Orion, which enables multi-agent orchestration across complex enterprise environments. So, these AI market investments, they are complemented by a strong innovation engine. The Makers Lab continues to play a central role in advancing applied AI research and engineering-led innovation across Tech Mahindra. During the quarter, Frost & Sullivan recognized Orion Marketplace, our next-gen AgentiCS AI solution, that enables enterprises to design, deploy, and manage autonomous action-oriented AI agents across business processes. Its hyperscaler agnostic architecture supports rapid deployment across assisted and fully autonomous modes, while maintaining enterprise-grade governance, transparency, and life cycle control. While capability and innovation form the foundation of Helix, scale will come from real-world enterprise adoption and a strong partner ecosystem. During the quarter, we continue to expand our ecosystem across hyperscalers, enterprise platforms, and emerging AI players, enabling us to bring more integrated and industry specific AI solutions to clients. One example is our collaboration with Microsoft on AI-driven 5G network digital twin solutions for autonomous network operations. This solution is designed to help communication service providers modernize their networks, improve service performance, and accelerate the monetization of next-gen 5G capabilities. Another example is our partnership with Kitsa, the AI operating system for clinical startups, to advance agentic AI-driven medical writing solutions for the global pharma and biotech industry. In Europe, we expanded our relationship with Telefonica Germany through a multi-year engagement to build an AI-first private cloud platform. So, these examples reinforce an important shift that we're seeing in the market. AI adoption is moving beyond pilots into production environments. Helix is enabling us to support this transition by integrating platforms, talent, partnerships, innovation, and delivery capabilities into a more scalable operating model. It's also bolstering our ability to structure and deliver outcome-based engagements.

Let me also briefly touch upon two of our portfolio companies, Comviva and Pininfarina. Comviva, as you know, is our software, specifically our telecom software arm. It continues to build momentum supported by revenue growth, improved margins, and a healthy order book. Drawing on a heritage of more than nine decades, Pininfarina is preparing for its own AI-led transformation of its mobility and architecture businesses, while strengthening its commercial and operational foundations. Moving now to deal momentum, we delivered total deal wins in the quarter of 1.078 billion. The wins are broad-based across key verticals and geographies, with the largest deal coming from the manufacturing and the healthcare life sciences verticals. I think this performance reflects continued client confidence in Tech Mahindra and our ability to deliver transformation programs anchored in domain expertise, operational execution, and AI-led capabilities. Based on the annual contract value won over the last 12 months, I see Tech Mahindra among the top 15 sourcing standouts across all regions, global, Americas, EMEA, and Asia.

Let me share a few notable wins from the quarter. A leading regional health system in the US selected Tech M as a strategic partner for an integrated applications and infrastructure managed services engagement. This is leveraging our experience supporting 200-plus health systems and deep healthcare transformation expertise. We will help them strengthen operational resilience, accelerate modernization, and enhance caregiver and patient experiences. We were selected by an American autonomous driving technology company to enhance the scale rollout of the fully autonomous technology across US cities and global markets. This deal will leverage Tech M's strong GIS domain expertise to deliver high-quality HD map development and maintenance services for the customer's technology. A leading global aerospace and defense company selected Tech Mahindra to provide end-to-end database administration services across a complex mission-critical environment and enhance the customer's long-term digital transformation objectives through AI-driven operations, strengthen cybersecurity and compliance, and cloud-ready operations. We were also selected by a leading global payments technology company as a preferred technology partner to support its next-gen product and program roadmap. Leveraging Tech M's product engineering expertise, payment domain knowledge, and AI-led delivery capabilities, the collaboration will help scale innovative payment solutions, reduce technical debt, and drive KPI led outcomes across global operations. During the quarter, we partnered with Perplexity and deployed Perplexity Enterprise Pro across our sales and client-facing teams. By embedding AI powered intelligence into account planning, pursuit strategy, and client conversations, we are enabling our teams to develop more relevant insights and shape stronger transformation propositions.

Lastly, I'm proud to share that Tech Mahindra has once again been recognized as one of the world's most sustainable companies by Time and ranked number one among Indian corporates. This recognition reflects our continued commitment to environmental stewardship, responsible business practices, and long-term value creation. It also reinforces our focus on extending sustainability beyond our own operations and working closely with partners and suppliers to build a more resilient and sustainable ecosystem. Before I close, I want to highlight an initiative that is personally quite meaningful to me. During the quarter, we announced the Tech Mahindra Global India Book Prize in partnership with the Jaipur Literary Festival. I've always believed that books shape not just what we know, but also how we think. So, in a world being reshaped by technology, the ability to explain, to question, to interpret, and to connect ideas is more important than ever. And this initiative reflects the broader spirit of Tech Mahindra's transformation, learning continuously, engaging deeply, and building for a future where technology and human understanding move forward together. With that, I will hand over to my colleague Rohit, who will take you through the financial performance for the quarter. Thank you.

Thank you, Mohit and Rohit. We will now conclude the stream for those of you who joined us on social media. Thank you again for joining us. We will now open the conference for a Q&A session for media friends who joined us online and are here. For those who are online, kindly post your questions in the chat box. Any questions here? If you can please state your name and the name of the publication.

Hello, sir. I'm Mohammad Wasim from The Pioneer. This is your 11th consecutive quarter of margin expansion. What are some key drivers behind this growth? Is this aligned with your financial year 2027?

Yeah, so look, I'll have Rohit talk a little bit about the levers, but at the end of the day, when we had set out the transformation plan, we had very specific markers for where we would expect the margin to land and we were very clear that we expected a margin of 15% for FY '27 and we are standing by that. And I feel that the trajectory that we've had over the past 11 quarters give us the confidence that we will hit the numbers. We're also now looking at strong pivot to growth and growth itself will give us increased operating leverage.

And what are the next steps to scale up this paid program?

Thank you, sir.

The next question is from Haripriya Suresh from Reuters. On a Y on Y basis for Q4 you showed broad-based growth. Are you seeing an uptick in discretionary spending and in any particular sectors? What does the demand environment look like for Q1?

Okay, so I think she's talking Q1 and Q2. So Haripriya, we've delivered as you see an extremely strong quarter, very strong, clearly industry leading growth, way ahead of our consensus estimates. So clearly we are seeing a positive demand environment from our tech and perspective. I feel that all the hard work that has gone into capability building, hiring talent, winning new clients, winning in consolidation deals is paying off for us. Manufacturing has been a huge driver of growth for us in this current quarter driven by some of the growth that we've seen in Pininfarina, but we've also seen strong growth in financial services. We continue to stay very optimistic about our healthcare business for the remainder of the year. Our retail business has been truly outperforming the competition and even in our core business of telecoms, we continue to see year-on-year growth. Even in a quarter where we have seasonal Comviva weakness, right? So, I feel performance has been strong across the board and we continue to expect performance to stay strong for the rest of the year. Obviously, given the obvious caveat that the macroeconomic situation should not dramatically change.

Any other questions in the room?

Sure. So, look, at the end of the day, there is some level of productivity that we are driving or we are expected to drive for our programs by using AI, but our headcount reductions are very marginal. There has not been any large-scale reduction in force that we have done that is driven by AI. I think for us, the very significant growth that we're seeing, we are the fastest growing in the industry among our peers on a YOY basis and so that gives us the confidence that we will continue to sort of grow and be able to utilize AI to drive productivity, but also hire where required.

The next question is from Reema Tendulkar, CNBC-TV18. What makes you confident you can exit with 15% EBIT? What will drive the margins from here and industry leading revenue growth?

So, we will not exit Reema with 15% margins. We will deliver 15% margins average for the year, right? So, that's even better than what you'd asked. In terms of confidence, look, I think we've had a strong start to the year and based on the order book that we have, the client relationships that we've built, the talent that we brought on board, and the fact that growth has actually been very broad-based, right? So, we have grown year on year in every single vertical and every single geography. So, that gives us the confidence that this is not a one-off piece, but this is a trend that will continue.

Any other questions from the room? And the next question is from Jas Parekh, what is the company's point of view on spending environment? Despite winning seven deals with more than $50 million in revenue, does the management expect quick translation of these details?

Yeah. So, yes, we've not won seven $50 million deals. We've added seven clients to our $50 million plus bucket, right? So, that gives us the confidence that we are growing in our largest and most important clients. The demand environment I feel there has been a degree of volatility, but on the whole we have a good order book, we have a good set of client relationships. We've been able to deliver growth in what is a seasonally hard quarter for us. So, I feel that gives us the confidence that we will continue to deliver growth for the rest of the year and meet our stated objective of being ahead of our peer average growth for the year.

The next question.

The next question is from Valerie from Hindu Business Line. Your headcount has been going down for a couple of quarters. Will this affect your campus hiring as well?

Well, look, I think as far as the campus hiring is concerned, it has been a little bit volatile because we've had limited visibility into revenue. Now that our visibility is stronger, I'm assuming that the campus hiring program will restart, but we don't have any numbers to share as of now for the annual intake that we expect to take.

The next one is from Deepangna, Moneycontrol. What's the outlook on AI revenue and deals? Your rivals have been talking about AI deals being shorter tenure and lumpy. How do you make AI revenue more recurring and sticky?

So, I think the thing that we're doing is we are infusing AI into each of our service lines. So, we are not doing discrete AI projects. Rather, AI is being woven into, so let's say if we're doing a Salesforce implementation, how can we do that much more quickly and effectively by using AI? If there's a complex multi-country SAP implementation, how do we drive AI into that initiative? How do we help aircraft manufacturers deliver product much more quickly by using AI? So, we're infusing AI into each of our service lines. There are clearly programs of work which are more AI strategy linked, but we don't think that that will inject significant lumpiness into our revenue profile.

She has a follow-up question. What drove the profit increase? Do you think the growth is sustainable? What are the reasons and when do you expect to start disclosing AI revenues?

So, yeah, we do feel that the growth is sustainable. Like I said, we have delivered growth in what is seasonally a weak quarter for us. On AI revenues, I think this is something that our chief operating officer, Atul Suneja, will be covering in the earnings call. We are looking at a range of indicators that show the progress that we're making on AI, whether it's training or it's tooling or it's engagement with clients or it's specific projects. I personally feel that there is no one metric, right? There is no one metric that you can report. And many of our peers have reported metrics and then taken them off. So, we want to make sure that we're doing this very thoughtfully. In any case, our Helix initiative clearly identifies the eight separate themes that we're driving for AI. They go all the way from tooling to talent and training to ecosystem partnerships to marketing and positioning. And we will report progress on each of these eight helix themes.

The next one is from Mamita Bakshi from PTI. A large IT company recently said it will have as many AI agents as human employees in 3 years. How does Tech M look at AI agent built up for itself in coming years? And how will it change your hiring plans?

Yeah, so look, I think the question is you can build a thousand agents, but if you never use them, they're quite useless. I think we want to build agents where it's meaningful for us to build agents rather than build agents to have some sort of account. So, we continue to build agents in customer service or customer experience or in data where we feel it's relevant. I do feel that the overall demand in the industry should increase driven by the need to drive modernization, driven by the need to build new data stacks, to build a new AI stack, to deal with the complexity that a much more rich technology landscape is giving to deal with the demands from a cybersecurity perspective. So, I do feel the demand will continue to increase, and I do feel that that work will be delivered by a combination of human and machine labor. It's very hard for now to segregate years down the line what that combination can be. But as far as the Tech M business itself is concerned, we are very optimistic about its long-term potential.

Could you check again if there are any other questions in the room? Okay, one last question. This is from Rukmini. It's a two-part question. Given the increase in larger accounts, however, the top client revenue quantum has decreased. Could you please explain? And second, also given Mahindra Group was a part of the turnaround plan, could you please share updates on how the company has moved?

Sure. So, look, if you look at because we track as we have said, we track our accounts where we have more than $20 million in revenue. These are our peak and prime accounts. And I can tell you that our P&P accounts are growing significantly faster than the company average on a year-on-year basis. So, that trend which started a while back is continuing. So, a lot of our growth or a significant portion of our growth is coming from our largest customers. That has not changed. As far as the Mahindra Group is concerned, we continue to engage very deeply with the group across its businesses. As you know, the group itself has a very strong digitization and now an AI adoption narrative and strategy. And we're very proud to be a comprehensive part of that strategy. As we build relationships with hyperscalers, as we build relationships with model builders, and with SAS companies, we are doing this increasingly in a very collaborative fashion with the entire group.

Thank you, Mohit. Thank you, Rohit. And thank you, everyone, for joining us. We will now be concluding the conference. Request you to please reach out to me and the team in case you have any questions. The recording of this conference will also be available on our social media channels and our website. Thank you once again.

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