In the third quarter of FY26, AI quietly influenced every aspect of Tech Mahindra’s growth, even as the company opted not to disclose AI revenue figures, unlike Infosys and Wipro.
The results show the IT firm rebuilding momentum through execution, margins, and deal flow, with AI deeply embedded in the work delivered.
The company reported consolidated net profit of ₹1,122 crore, up 14.1% year on year. Revenue rose 8.3% to ₹14,393 crore, reflecting cautious demand across global enterprises. This marks the ninth consecutive quarter of margin improvement.
New deal wins totalled $1.1 billion in the quarter, up 47% year on year. It’s the highest the company has reported in the past five years. “Our deal wins on an LTM basis are the highest we have achieved in the past five years, reflecting an improved deal-win run-rate over the past several quarters,” Mohit Joshi, chief executive and managing director, said.
The AI Story
This quarter, Joshi linked deal performance to AI, emphasising that winning large enterprise deals now requires credible AI capability, without making AI a headline revenue source.
“Almost all of our large deals are now AI-infused,” he said, adding that clients expect proof of productivity gains, automation, and transformation powered by AI tools.
Tech Mahindra’s stance diverges from peers. TCS reports $1.8B in AI revenue, HCLTech $146M, growing 20% quarterly. Infosys discusses AI impact, Wipro avoids clear AI revenue figures.
He explained that the challenge lies in the fact that one’s definition of AI is either too narrow, limited to selling a large language model or providing AI-specific consulting, or too broad.
Joshi believes reporting a small number from model sales underestimates AI’s integration, while stating that most clients use AI offers little insight.
“Almost all of our clients over $20 million have AI programs in position,” Joshi said, pointing to a shift from pilots to scaled, multi-year initiatives integrated into core operating models.
Biswajit Maity, senior principal analyst at Gartner, told AIM that the growth is largely driven by Tech Mahindra’s TechM Orion. This agentic AI platform helps global enterprises deploy and manage AI solutions more quickly, he said.
Tech Mahindra specializes in SAP, offering support (build, operate, manage) for RISE with SAP, especially on AWS and Azure. They also deliver sector-specific solutions for BFSI, healthcare, and manufacturing.
During the quarter, the company deepened its collaboration with Google to accelerate enterprise adoption of Gemini Enterprise using Gemini 2.5 multimodal models.
The company is working to build a foundational LLM for the education sector under the IndiaAI Mission. Joshi, however, said it will not have any significant or meaningful impact on revenue.
The Labour Shift
The managing director mentioned a reevaluation of pricing strategies. Tech Mahindra is exploring models distinguishing human labour from digital labour.
Today, AI-driven productivity shows up as cost savings passed on to clients. The company wants to change that. Joshi stated that they aim to alter the current paradigm by billing clients separately for human labor and digital labor.
One proposal being discussed is to connect digital labour pricing to token consumption, an idea the company outlined in a white paper with Forrester. It is an early signal of how Indian IT firms may eventually monetise AI beyond headcount-linked billing.
Financially, the benefits of discussing AI are already evident. Improved productivity, especially in fixed-price programs, allowed the company to increase revenue without expanding headcount.
Total employee strength stood at 1,49,616, down 872 year on year, while revenue per employee continued to rise. Joshi rejected the idea that this indicates shrinking opportunities, arguing instead that efficiency improvements are freeing capacity and increasing margins.
Amid peers reporting mixed growth and margin pressure from regulatory changes, Tech Mahindra’s quarter is notable for its clear direction. AI is not marketed as a shiny new revenue stream but as the engine behind deal wins, productivity, and margin expansion.
For Tech Mahindra, AI is no longer viewed as a standalone category. Instead, it has become the core operating system that guides the company’s growth strategy.
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