Tech Mahindra Q1: revenue +17.7%, EBIT +53% YoY; consol PAT ₹1,465 Cr up 28% but trails street

Tech Mahindra opened FY27 with a strong operating quarter that fell just short of an aggressive profit bar. Consolidated revenue rose to ₹15,712 Cr, up 17.7% YoY and 4.2% QoQ (6.6% YoY in constant currency), comfortably ahead of the ~₹15,300-15,530 Cr the street modelled. Operating profit was the standout: EBIT climbed 53.3% YoY to ₹2,264 Cr and EBIT margin expanded to 14.4% — up ~330 bps YoY and ~60 bps QoQ — the fifth straight quarter of margin gains under CEO Mohit Joshi and the 'Project Fortius' efficiency drive. Net profit attributable to owners was ₹1,465 Cr, up 28.4% YoY and ~8% QoQ, with PAT margin at 9.3%.

The one blemish is where the bottom line landed versus expectations. Consensus had penciled in 40%+ YoY PAT growth (YES Securities ₹1,610 Cr); the actual ₹1,465 Cr is a clear miss on profit even as revenue and margins beat. The gap sits almost entirely on the 'other income' line — a ₹106 Cr net forex loss this quarter versus a ₹218 Cr forex gain a year ago — which dragged PBT (₹2,042 Cr) well below the operating EBIT print. The divergence is starker at the standalone entity, where PAT actually fell 3.4% YoY to ₹1,138 Cr as its other income swung to a ₹137 Cr loss; consolidated is unambiguously the reporting basis that tells the growth story, and readers seeing the flat standalone number elsewhere should not mistake it for weakness.

The stock went into the print at ₹1,513, up 4.6% over the past month of trading.

For context: this is the second-highest quarterly PAT of the last 6 quarters; PAT has now risen for 2 consecutive quarters; revenue is at a 6-quarter high.

EPS (basic) ₹16.53 vs ₹12.87 YoY — FCF $167 mn (108% of PAT, +94% YoY), DSO 84 days, cash ₹9,695 Cr; headcount 146,760 (−863 QoQ), IT attrition 11.8%.

No exceptional item this quarter — clean YoY comparison (the ₹272 Cr Labour Codes one-off was booked in FY26, absent from both compared quarters).

Against management's own FY27 guidance the quarter is on track: the stated target of ~15% EBIT margin is within reach at 14.4% exiting Q1, and CFO Rohit Anand framed it as 'a strong Q1 with broad-based growth, margin expansion and disciplined working capital.' Demand signals back the tone — new deal wins TCV of $1,078 mn (+33% YoY) marked a third consecutive $1 bn+ quarter, LTM bookings hit $4,063 mn (+37.5% YoY), and $50 mn+ clients rose by seven YoY to 33. Free cash flow of $167 mn (108% of PAT, up 94% YoY) and DSO improving to 84 days underline the working-capital discipline.