Resilient Momentum: Tech Mahindra Posts Decade-High Quarterly Growth Despite U.S. Revenue Dip

Image Source: ET Telecom

Tech Mahindra posted its strongest constant currency revenue growth in a decade during Q2, led by manufacturing, BFSI, and healthcare, offsetting U.S. revenue declines caused by macro-economic headwinds. Despite North American softness, diversified sector momentum and strategic execution support a cautiously optimistic outlook for FY26.

Tech Mahindra has reported its largest quarterly revenue growth in constant currency terms in ten quarters during the second fiscal quarter, showcasing its resilience amid global economic headwinds. While the U.S. market saw revenue decline due to challenging macro-economic conditions, the company recorded broad-based growth across manufacturing, BFSI, and healthcare verticals, marking a strong rebound in demand.

The IT services major’s performance indicates a turnaround after multiple soft quarters, underscoring the strength of its diversified industry exposure and renewed deal momentum. Growth in constant currency suggests underlying volume improvement beyond the impact of currency fluctuations. Executives noted that while inflationary pressures and cautious tech spending continue to weigh on North America, other geographies and sectors have provided a balanced growth cushion.

Analysts view the broad-based expansion as a positive sign that Tech Mahindra's strategy to deepen vertical capabilities is paying off. Manufacturing demand was driven by digitization in supply chains, BFSI growth came from core system modernization, and healthcare saw traction in digital patient engagement. Despite the U.S. slowdown, the future outlook remains cautiously optimistic, with expectations for strong deal execution in the rest of FY26 driven by telecom 5G transformation projects and enterprise cloud adoption.

Key highlights

Second quarter delivered the largest revenue growth in constant currency terms in 10 quarters.
U.S. revenues saw a decline due to macro-economic uncertainty and tighter corporate tech budgets.
Broad-based growth across manufacturing, BFSI, and healthcare verticals.
Manufacturing uptrend supported by supply chain digitization initiatives.
BFSI demand buoyed by modernization of legacy systems and digital banking push.
Healthcare growth driven by patient digital engagement platforms and AI-led health analytics.
Executives maintain a cautiously optimistic outlook for FY26 despite U.S. softness.

Industry watchers believe the company’s strategic focus on diverse verticals has helped insulate it from region-specific turbulence. The performance could set the tone for improved investor confidence and higher visibility in deal pipelines.

Source: Company earnings announcement, executive commentary.

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