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Indian IT services provider Tech Mahindra reported better-than-expected quarterly profit and revenue on Tuesday, helped by strong demand and the company also declared a special dividend.

The Pune-based company's revenue from operations increased nearly 21% to 131.3 billion Indian rupees ($1.59 billion) in the July-September quarter, but a 27% jump in expenses pulled net profit down 4% to 12.85 billion rupees.

Analysts on average were expecting a profit of 12.04 billion rupees on revenue of 129.9 billion rupees, according to IBES data from Refinitiv.

India's IT services industry was among the top beneficiaries of the pandemic's digital boom, as several businesses rushed to digitise infrastructure and adopted remote or hybrid working policies.

However, top-tier IT firms have recently given cautious forecasts so far amid the global economic uncertainty.

Tech Mahindra's total deal win fell 4.5% to $716 million in the latest second quarter.

The company also approved a special dividend of 18 rupees per share.