Tech Mahindra’s Q2 Profit Dips 4.5% to ₹1,195 Crore; Declares ₹15 Interim Dividend — Persistent Systems Surges on Strong Results

Tech Mahindra Limited on October 14 reported a 4.5% year-on-year (YoY) decline in its consolidated net profit to ₹1,195 crore for the quarter ended September 30, 2025. Despite the fall in profit, the company’s revenue from operations rose 5.1% YoY to ₹13,995 crore in Q2 FY26, supported by strong performances in its banking and manufacturing divisions.

Revenue Rises Despite Profit Decline

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The drop in profit was primarily due to the absence of a one-time exceptional gain from the sale of land, which had boosted earnings in the same quarter last year. Without this non-recurring income, the current profit appeared lower, the company explained.

Tech Mahindra's sales and net profit increased 4.8% and 4.7%, respectively, sequentially, demonstrating consistent operational advancement. With a record date of October 21, the company announced an interim dividend of ₹15 per share. The dividend is expected to be paid on November 12, 2025, at the latest.

Dividend Announcement and Strategic Highlights

Tech Mahindra reported an EBIT of ₹1,699 crore, up 33% YoY, while its total contract value (TCV) of new deal wins stood at $816 million. The Tech Mahindra shares closed 1.2% higher at ₹1,469 apiece on the NSE following the announcement.

CEO and Managing Director Mohit Joshi highlighted the company’s “broad-based growth,” crediting its new AI-driven innovations, TechM Orion and TechM Orion Marketplace, for driving business transformation. “Our leadership in next-generation AI has been reinforced by industry recognition,” he said.

CFO Rohit Anand noted that this was the eighth consecutive quarter of margin expansion, achieved through efficiency and disciplined execution. “Our TCV is up 57% YoY on an LTM basis, reflecting strong deal conversions. The ₹15 per share dividend underscores our commitment to shareholder value,” he added.

As of September 30, 2025, Tech Mahindra’s total workforce stood at 1,52,714 employees, a decline of 1,559 from the previous year.

Persistent Systems Impresses with Strong Q2 Performance

Meanwhile, Persistent Systems Limited witnessed a strong market reaction following its robust Q2 FY26 results. The company’s stock surged over 6% to ₹5,688.70 in early trade on Wednesday, supported by a 45% YoY rise in consolidated net profit to ₹471.4 crore. Revenue grew 23.6% to ₹3,580.7 crore, while operating profit rose 44% to ₹583.7 crore, with margins expanding to 16.3%. Persistent reported a TCV of $609.2 million and an ACV of $447.9 million for the quarter.

Brokerages responded positively to the results. CLSA maintained a bullish on Persistent Systems, citing consistent growth in order book, margins, and returns. HSBC issued a “hold” rating, pointing to improved profitability but cautioning about high valuations. Nomura retained a “neutral” stance, noting all-round improvement but warning that the stock’s valuation—trading at roughly 58 times FY27 EPS—remains rich.

Persistent’s strong performance and upward revision in analyst targets have positioned it as one of the top-performing mid-tier IT firms this earnings season.

Conclusion

Persistent Systems continues to amaze with strong revenue and margin increase, while Tech Mahindra's Q2 results show consistent operational growth despite a fall in net profit from last year's one-time gain.  The disparate outcomes point to a wider performance gap in India's IT industry in the face of global economic uncertainty.