Tech Mahindra Q4 Preview: Margins likely to improve; revenue growth may remain muted

Tech Mahindra Q4FY26 Result Preview: Shares of Tech Mahindra will be watched closely on April 22 as the company gets ready to announce its Q4FY26 results. Expectations point to a steady quarter, with only a slight uptick in revenue but a better showing on profitability, according to estimates by Zee Business Research Team.

Stock movement ahead of earnings

The stock has moved in different directions across time frames. On April 21, it closed at Rs 1,499.00, down Rs 5.40 or 0.36 per cent for the day. Over the past month, it has gained 8.31 per cent. It is also up 3.47 per cent over six months. However, it has slipped 6.76 per cent so far this year, even as it remains higher by 9.14 per cent over the past one year.

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Revenue expected to hold steady

On a quarter-on-quarter basis, dollar revenue is expected to stay almost unchanged at about $161.6 crore, compared with $161 crore in the previous quarter. In rupee terms, revenue may come in at around Rs 14,819 crore, up 3 per cent from Rs 14,393 crore. BFSI and telecom are expected to support the topline, as these segments continue to contribute a large share of the company’s business.

Margins may improve slightly

Operating performance is expected to see some improvement. EBIT is estimated at Rs 2,022 crore, up 6.9 per cent from the previous quarter. Margins are likely to inch up to 13.6 per cent from 13.1 per cent.

Net profit is expected at around Rs 1,453 crore, which would be a 29.5 per cent increase over the previous quarter. The jump is partly because the earlier quarter had a lower base due to an impact related to labour code changes.

Deal wins and currency support

Deal activity is expected to remain steady, with net new deal wins seen at about $1 billion for the quarter. The rupee’s movement during the period is also likely to have played a role in supporting earnings.

What will matter most

The numbers themselves may not be the only focus. What the management says about demand trends will be equally important. Investors will be looking for clarity on client spending, deal flow and any guidance for the coming quarters.

Tech Mahindra Q3FY26 result highlights

Tech Mahindra on Friday reported its December quarter results, showing an improvement in operating performance even as profit after tax declined sequentially.

Revenue from operations rose to Rs 143,932 crore in Q3, compared with Rs 139,949 crore in the September quarter. Total income also increased to Rs 143,715 crore from Rs 140,349 crore on a quarter-on-quarter basis. Profit after tax came in at Rs 11,220 crore, lower than Rs 11,945 crore in the previous quarter, reflecting higher costs during the period.

Earnings before interest and tax (EBIT) rose 11.3 per cent quarter-on-quarter to Rs 1,892 crore, up from Rs 1,699 crore in Q2. Operating margin improved to 13.1 per cent from 12.1 per cent, indicating better cost control and execution.

The company said its Q3 performance was impacted by a one-time charge related to the implementation of new labour codes. Tech Mahindra noted that the labour codes had a negative impact of Rs 272 crore during the December quarter.

The company’s focus on margin expansion and operational efficiency remained intact, even as near-term profitability faced pressure from regulatory and cost-related factors.