Tech Mahindra Q2 profit jumps 33% to ₹1,586 crore, board approves 1:1 bonus issue and ₹15 dividend

Tech Mahindra posted a 32.7% rise in consolidated net profit to ₹1,585.6 crore for the second quarter, delivering double rewards to its shareholders through an interim dividend of ₹15 per share and a 1:1 bonus share issue.

Revenue from operations rose 15.6% year-on-year to ₹16,180.2 crore, compared with ₹13,994.9 crore in the corresponding period last year. On a sequential basis, profit after tax rose 8.2%, while revenue increased by 3%.

Alongside the earnings, the company's board declared an interim payout of ₹15 per equity share of face value ₹5 each, representing a 300% dividend. The record date to determine eligibility for the dividend has been set for 23 October, with payments scheduled to be completed by 13 November.

The board also recommended issuing one bonus share for every existing share held, subject to approval from shareholders via postal ballot. To facilitate the corporate action, the board approved raising the company's authorised share capital from ₹924.3 crore to ₹1,000 crore. The record date for the bonus distribution will be notified separately.

Key financial highlights

Earnings before interest and tax (EBIT) climbed 40.5% to ₹2,387 crore, with chief financial officer Rohit Anand noting that operating margins expanded for the twelfth consecutive quarter.

Deal momentum and hiring

New deal bookings remained robust at $1,023 million in total contract value, climbing 25.4% year-on-year. It marks the fourth consecutive quarter in which order intake surpassed the $1 billion threshold.

"With 7.2% year-on-year constant currency growth, we continue to sustain business momentum," said chief executive officer and managing director Mohit Joshi, pointing to durable demand across core verticals including manufacturing and communications.

Addressing potential regulatory shifts in overseas markets, Joshi noted that the firm's reliance on American H-1B visas remains minimal at around 1% of its overall workforce, with nearly 70% of its US staff hired locally.

Tech Mahindra expanded its workforce during the period, adding 5,446 professionals to take total headcount to 152,206. Last-twelve-month IT attrition came in at 11.7%. Free cash flow reached $135 million, while cash and cash equivalents stood at ₹7,330 crore.

Advances in artificial intelligence

The quarter also saw Tech Mahindra step up domestic and global digital innovation, highlighted by the rollout of Indus Terra, a 30-billion-parameter foundational language model built alongside Nvidia and Amazon Web Services under the government's IndiaAI Mission. The company also tied up with the I-HUB Quantum Technology Foundation to advance indigenous quantum computing research.

Shares of Tech Mahindra closed 4.6% higher at ₹1,648.70 on the BSE ahead of the announcement.