Indian IT services company Tech Mahindra has reaffirmed its operating margin target of 15 per cent for fiscal 2027 after reporting stronger-than-expected revenue in the second quarter, supported by major contract wins and growing demand for technology transformation services.
The company reported consolidated quarterly revenue of 161.80 billion rupees, approximately US$1.70 billion, representing a 15.6 per cent increase compared with the same period last year. The growth was largely driven by an increase in large outsourcing contracts across its communications division and other business segments.
New deal bookings reached US$1.02 billion during the quarter, marking a 25.4 per cent increase year over year. The strong performance reflects continued demand for digital transformation, modernization and technology services as businesses seek to improve efficiency and incorporate artificial intelligence into their operations.
Chief Executive Officer Mohit Joshi said Tech Mahindra is increasingly shifting its strategic focus toward revenue growth after previously concentrating on strengthening profitability. The company remains committed to its fiscal 2027 margin target while pursuing new opportunities in emerging technologies.
Artificial intelligence has become an important component of Tech Mahindra’s business strategy, with Joshi indicating that nearly all major contracts now incorporate AI-related services. The company plans to begin separately reporting revenue generated from defined AI categories during the second half of the fiscal year.
The development comes as India’s IT services industry faces growing competition for major outsourcing contracts and uncertainty surrounding the potential impact of AI on traditional labour-intensive services. Businesses are increasingly demanding productivity improvements through automation, prompting technology providers to adapt their service offerings.
Tech Mahindra acknowledged that AI-driven efficiency requirements are creating pressure on conventional service models. However, the company believes these challenges are being balanced by expanding opportunities in application modernization, data management and the development of new digital solutions.
The company expects these emerging areas to support long-term growth in the technology services market as enterprises continue investing in artificial intelligence and digital infrastructure.
