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TechM posted an in-line operating performance in Q4. Revenue grew 0.9% QoQ to USD1.63bn (up 0.6% CC), a tad ahead of our estimates. EBITM expanded by ~70bps QoQ to 13.8%, marking the 10th consecutive quarter of margin expansion, aided by operating efficiencies from Project Fortius, currency tailwinds, and Comviva seasonality, partly negated by investments in AI and large deals transition costs. Deal intake remained strong, with TCV of USD1.07bn in Q4 (second consecutive quarter of >USD1bn TCV). While the macro remains uncertain, the company believes it has sufficient stabilizers and resilience to continue with growth acceleration in FY27. The management reiterated confidence on outperforming the peer-average growth by FY27 and progressing toward ~15% EBITM, supported by broad-based growth, strong deal intake, healthy deal pipeline, improved account mining, sustained investments in AI, consulting, high-growth service lines, and strengthening partnerships and alliances ecosystem. It expects margin expansion in FY27 to be driven by a combination of continued cost takeout and operating leverage as revenue growth accelerates. We cut FY26/FY27E EPS by 1.7/1.5%, factoring in the Q4 performance. We retain REDUCE with TP of Rs1,450 at 17x Mar-28E EPS.

Results summary

TechM reported revenues of USD1.63bn, up 0.9% QoQ (0.6% CC), and tad above our expectations of USD1.61bn (0.4% CC). Revenue for the IT Services and BPS segments was up 1.0% and 0.5% QoQ, respectively, in USD terms. EBITM expanded by ~70bps QoQ to 13.8%, 10bps above our expectation of 13.7%. The margin expansion is driven by benefits accruing from currency, Comviva seasonality, and Project Fortis–led operational efficiency. Total headcount declined 1.3% QoQ to 147,623. LTM attrition was down by 20bps to 12.3%. The company has declared a dividend of Rs36/sh (Rs51/sh for FY26). What we liked: Revenue beat, steady EBITM expansion, and healthy deal intake. What we did not like: Softness in top 5 clients, sequential softness in retail, and others

Broad-based growth with pockets of softness in retail and Americas

Across verticals, revenue growth was led by BFSI (8.0% QoQ), followed by Hi-tech, Media (2.5%), and Communications (1.8%), while Retail, Transport and Logistics declined 5.3%, and Manufacturing stayed flat. Among geographies, Europe and ROW grew 2.7% each in USD terms, while Americas declined 0.8%. Revenue from top 5 clients declined 1.4% QoQ, while top 6-10 grew 5.2%.

Progress on AI

TechM is transitioning to an AI-led delivery model combining human talent with autonomous agents, moving toward outcome-based and non-linear commercial constructs. AI deployment is already yielding tangible benefits, with ~7% improvement in revenue per employee in FY26, driven by productivity gains and automation. It has built a strong AI asset base, including 2 proprietary LLMs and more than 350+ servicespecific agents, supporting scalable and repeatable delivery. It has scaled AI readiness significantly, with ~80% of its workforce trained in AI and ~76% AI certified, enabling broad-based adoption across service lines.

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