Tech Mahindra Ltd. will begin rolling out salary hikes from the second quarter of the current financial year in a phased manner, as the IT services company reported lower employee attrition and a decline in headcount for the quarter ended June 30. According to reports from NDTV Profit, CEO and Managing Director Mohit Joshi announced during the company's post-earnings conference call that the wage increases will start taking effect in Q2, with employees being informed in the coming days.
Tech Mahindra reported mixed June-quarter results that missed analyst expectations despite sequential improvements. As reported by NDTV Profit, the company posted a consolidated net profit of ₹1,465 crore for the June quarter, representing an 8.2% sequential increase from ₹1,354 crore in the previous quarter, but falling short of the Bloomberg consensus estimate of ₹1,607 crore. Revenue from operations rose 4.2% quarter-on-quarter to ₹15,712 crore, broadly in line with analysts' expectations of ₹15,422 crore. The company's EBIT increased 9.2% to ₹2,264 crore from ₹2,073 crore, while margins improved 70 basis points to 14.4% from 13.7%.
Chairman Anand Mahindra addressed shareholders at the 39th annual general meeting, dismissing fears that AI will destroy India's IT services sector. As reported by NDTV Profit, Mahindra stated that "The role of IT services will not diminish. It will change, of course. And in many ways, it will become more important." He compared AI to smartphones, explaining that companies like Tech Mahindra provide the enabling layer that turns powerful technology into intelligent business partners. The company has launched Project Helix to integrate human expertise with AI agents, combining domain knowledge, engineering depth, governance and responsible AI practices around each client's context. According to Mahindra, AI is no longer just a productivity tool at the edge of the enterprise, but the front and centre of how businesses design work, serve customers, manage risk and make decisions.
Tech Mahindra's employee retention improved significantly during the April-June quarter, with the annualised attrition rate declining to 11.8% from 12.1% in the preceding three months and 12.6% a year earlier. According to NDTV Profit, the company ended the quarter with a total workforce of 146,760 employees, down by 688 from the March quarter. Most notably, the company's core IT workforce fell below 75,000 employees for the first time in recent quarters, standing at 74,689 as of June 30 compared with 75,377 three months earlier. Compared with a year ago, the company has reduced its IT workforce by 5,298 employees from 79,987.
CEO Mohit Joshi indicated that recruitment would resume as revenue growth continues, stating during the earnings call that "we see a good trajectory for revenue growth for the remainder of the year and I assume that that will mean hiring in the remainder of the year." As reported by NDTV Profit, he attributed the current headcount reduction to productivity gains in fixed-price projects, helped by AI-led efficiencies, which reduced the need for backfilling roles. The company expects to announce the salary hikes in a phased manner, with the first phase becoming effective in Q2. Mahindra highlighted that the company has delivered margin expansion for ten consecutive quarters despite a volatile environment, with deal wins exceeding $1 billion in successive quarters. He emphasized that the enterprise of tomorrow will not be all-human or all-AI, but built on human judgment amplified by AI capability, with clients needing partners who understand that AI transformation is a business, talent and operating model transformation.
