Indian IT services giant Tech Mahindra (TEML.NS) on Wednesday reported a robust fourth-quarter performance, highlighted by its first double-digit revenue growth in three years. Despite a slight miss on net profit estimates, the company’s stock staged a dramatic recovery as investors cheered strong deal wins and a generous dividend payout.

Revenue Beats, Profit Misses

For the quarter ended March 31, 2026, Tech Mahindra's consolidated sales rose 12.6% year-on-year to ₹150.76 billion ($1.61 billion). This surpassed the LSEG-compiled analyst estimate of ₹147.77 billion.

• Quarter-on-Quarter Growth: Revenue increased 4.7% from ₹14,393 crore in the previous quarter.
• Net Profit: The company posted a net profit of ₹13.54 billion, up 16% YoY and 20.6% QoQ. However, this trailed Bloomberg’s more aggressive estimate of ₹15.11 billion, signaling continued pressure on operational margins.

Telecom Resilience and Currency Tailwinds

In a surprise move that defied industry trends, Tech Mahindra’s core communications business—accounting for a third of its total revenue—grew 5.6% YoY. This outperformance comes even as larger rivals like HCLTech flagged softness in discretionary spending within the telecom sector.

The company also benefited from a 4% depreciation of the Indian Rupee against the U.S. Dollar during the quarter, providing a boost to margins as a majority of software billings are conducted in foreign currencies. Geographically, the Americas led growth with a 7.7% jump, followed closely by Europe at 7.4%.

The IT major’s deal pipeline showed significant strength, with net new order bookings rising to $1.07 billion, compared to $798 million in the same period last year. A key highlight was the announcement of a massive five-year strategic deal with European telecom leader Orange Business, further cementing Tech Mahindra's dominance in the global communications-tech space.

Rs 51 Total Dividend for FY26

Rewarding its shareholders, the Board of Directors recommended a final dividend of ₹36 per equity share.

• Total Payout: When added to the interim dividend of ₹15 declared in November, the total dividend for the full financial year 2026 stands at ₹51 per share.
• Market Reaction: Tech Mahindra shares, which had plunged 6% in pre-result profit booking, erased all losses post-announcement to trade flat at ₹1,501.80.

Tech Mahindra’s revenue beat stands in contrast to a mixed earnings season for the "Big Four." While TCS posted a strong beat, Wipro and HCLTech recently missed estimates due to delays in deal ramp-ups and client-side spending cuts. Tech Mahindra’s ability to navigate the telecom slowdown suggests its internal restructuring and focus on high-value deals are beginning to yield results.