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The US HIRE Act, which proposes a 25% outsourcing tax, as well as the H-1B visa shocker, are challenges for Tech Mahindra and India's $283-billion IT industry.
Updated on: Oct 14, 2025 11:19 PM IST
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Tech Mahindra Ltd. is banking on its financial services and manufacturing to deliver growth in the second half of the ongoing fiscal, even as US business is hit, according to its chief executive officer.
"Macro is stabilising and improving in parts but it's still fragile...but we do see stabilisation and hopefully see growth in the second half of the year," CEO Mohit Joshi said at a media scrum in Mumbai on Tuesday (14 October 2025). “I believe last one year has been a low point for the [IT] industry, but we do expect growth in the future.”
That optimistic stance comes even as Tech Mahindra's consolidated revenue from the Americas market fell 2.7% year-on-year, according to the company's second-quarter results declared on Tuesday. But a sequential growth of 2.6% in the geography that accounts for nearly half of its topline bodes well for the fiscal ahead.
Tech Mahindra Q2 Results 2025-26
Consolidated revenue of India's fifth largest IT services firm rose 4.8% over the previous three months to ₹13,995 crore in quarter ended 30 September 2025, according to an exchange filing on Tuesday. That compares with the ₹13,777.50-crore estimate of analysts tracked by Bloomberg.
- Revenue up 4.8% at ₹13,995 crore (Estimate: ₹13,777.50 crore)
- EBIT up 15% at ₹1,699.30 crore (Estimate: ₹1,609 crore)
- EBIT margin up 100 basis points at 12.1% (Estimate: 11.67%)
- Net profit up 5% at ₹1,194.50 crore (Estimate: 1,285 crore)
- Free cash flow of $237 million, or 1.75 times of profit after tax
One basis point is one-hundredth of a percentage point.
In dollar terms, Tech Mahindra's revenue rose 1.4% sequentially to $1.586 billion. It was up 1.6% in constant currency.
The company's largest business segment, communications, saw 2.2% year-on-year revenue decline, but Joshi noted signs of recovery. Revenue from manufacturing grew 5.2%, and banking grew 6.2%.
Tech Mahindra Outlook
Tech Mahindra, which has been lagging peers for several years, is trying to make a turnaround under CEO Joshi, who was appointed in late 2023.
But India's $283-billion IT sector has been dealing with cautious client spending amid economic uncertainties, particularly in North America for nearly two years now. The US HIRE Act—which proposes a 25% outsourcing tax amid a H-1B visa crackdown—are also expected to upend the industry's playbook.
Still, that Tech Mahindra's second-quarter performance augurs well for the second half of the fiscal, according to StoxBox research analyst Sagar Shetty. “Execution on large-deal ramp-ups and sustained margin expansion will be the key catalysts in the coming quarters,” he told Reuters.
On Tuesday, Tech Mahindra shares rose 1.19% to ₹1468.15 apiece on the BSE even as the benchmark Sensex ended the day 0.36% lower at 82,029.98 points. The quarterly results were declared after market hours.
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