Tech Mahindra Profit Drops 6% On Labour Codes, Revenue Rises

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AuthorKavya Nair|Published at:
Tech Mahindra Profit Drops 6% On Labour Codes, Revenue Rises
Overview

Tech Mahindra reported a 6.1% sequential profit decline to ₹1,122 crore in Q3 FY26. A ₹272 crore provision for new labour codes impacted the bottom line. Revenue climbed 2.8% to ₹14,393 crore, while operating margins expanded to 13.1%.

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Profit Hit by Labour Code Changes

Tech Mahindra Ltd. reported a 6.1% sequential dip in net profit for the third quarter of FY26, settling at ₹1,122 crore. The decline was primarily attributed to the one-time impact of new government labour codes, which necessitated an employee benefit provision of ₹272 crore. The company disclosed these results in an exchange filing on Friday.

Revenue and Margins Show Growth

Despite the profit decrease, Tech Mahindra's revenue saw a notable increase of 2.8%, rising to ₹14,393 crore from ₹13,995 crore in the previous quarter. Earnings Before Interest and Tax (EBIT) also demonstrated strength, climbing 11.3% to ₹1,892 crore. The company's operating margin expanded to 13.1% from 12.1% in Q2 FY26.

Analyst Expectations

The IT firm's performance aligns with broader industry trends, as several peers have also reported impacts from the new labour codes, effective November 21, 2025. While the net profit figure missed some analyst estimates, the robust revenue growth and margin expansion suggest underlying operational health.

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