Tech Mahindra's growth in FY26 will be primarily driven by markets in Europe and APJ, according to Anand Mahindra

Tech Mahindra's growth in FY26 will be primarily driven by markets in Europe and APJ, according to Anand Mahindra

In a recent announcement, Tech Mahindra, the leading IT services and solutions provider, has outlined its growth strategies for Europe and the Asia-Pacific Japan (APJ) region for the financial year 2026 (FY26). The company's strategies aim to build on its existing momentum in Europe and leverage strategic partnerships, particularly in hi-tech sectors.

For Europe, Tech Mahindra reported a robust growth of approximately 11.7% year-on-year in Q1 FY26. This growth was driven by a strengthening deal pipeline and recovery from previous quarters' challenges. The company's strategy for Europe includes:

- Continuing to capitalise on increased deal wins, as evidenced by the total contract value (TCV) of $809 million in Q1 FY26, a 51% year-on-year increase. - Addressing client-specific engagement challenges and maintaining a robust pipeline to enable faster recovery and near-term growth, likely through tailored offerings and targeted vertical solutions in communications and BFSI sectors. - Growing the Communications vertical, which forms about a third of the turnover, supported by client spending stabilisation across various global regions. - Strengthening margins and operational efficiency, as evident from a 260 basis points EBIT margin improvement to 11.1% in Q1 FY26.

Regarding the Asia-Pacific Japan (APJ) region, there is no detailed mention of specific growth strategies in the available documents. However, Tech Mahindra's overall FY26 outlook shows optimism due to strong deal wins and strategic partnerships, such as with KOGO AI for next-generation enterprise AI solutions. These partnerships are likely to benefit growth across key markets globally, including APJ. The company is also focusing on hi-tech sectors through strategic partnerships, which could imply a push in APJ where technology transformations are in demand.

In summary, Tech Mahindra's key growth strategies for FY26 focus on leveraging robust deal pipelines and increasing deal wins in Europe for sustained growth and margin improvement. The company is also using strategic collaborations and hi-tech partnerships to expand in APJ and other markets, stabilising and growing key industry verticals like Communications and BFSI across geographies. The strategies reflect a balanced focus on market-specific opportunities, operational agility, and technology-driven differentiation to achieve growth in FY26.

The company manages client concentration risk by deepening client relationships, proactive engagement, co-innovation, and value-driven delivery. Anand Mahindra, Chairman of Tech Mahindra, predicts higher growth for the company in FY26 from Europe and a few markets in APJ. Over the next two to three years, Tech Mahindra plans to invest in infrastructure and market position in key markets by investing in sales, marketing, and key service lines across strategic verticals.

The article was published on July 17, 2025. It is worth noting that in FY25, America contributed the most to Tech Mahindra's revenue, while West Asia and Israel operations had no material impact on the overall business. Tech Mahindra partners with Mahindra University and other leading institutions to ensure access to relevant learning across strategy, domain technology, and process. The company is simplifying its legal entity structures across jurisdictions, finding optimization benefits outweigh liquidation costs.

Tech Mahindra's AI strategy will be executed on four foundational pillars: transformation, productivity, innovation, and assurance. The company invests in local skilling in Tier-2 and Tier-3 cities in India and partners with academic institutions. Services at Tech Mahindra are currently unaffected by tariffs, but the company is closely monitoring the evolving situation and its indirect impact on telecom clients. Tech Mahindra's client concentration is similar to that of large-cap IT services players. The company remains open to setting up centres like the one in Chennai and other cities, assessing opportunities in collaboration with relevant stakeholders.

In conclusion, Tech Mahindra's growth strategies for FY26 demonstrate a commitment to leveraging its strengths in Europe, expanding into hi-tech sectors, and addressing client-specific challenges across geographies. The company's focus on technology, operational efficiency, and strategic partnerships positions it well for growth in the coming financial year.

1. Tech Mahindra's strategies in FY26 indicate a focus on increasing deal wins and maintaining operational efficiency in Europe, as shown by a 51% year-on-year increase in total contract value (TCV) and a 260 basis points EBIT margin improvement.
2. The company's growth strategies in the Asia-Pacific Japan (APJ) region involve capitalizing on strategic partnerships, such as the one with KOGO AI, to expand in hi-tech sectors and key markets, including APJ.
3. Anand Mahindra, Chairman of Tech Mahindra, anticipates higher growth for the company in FY26, particularly from Europe and a few markets in APJ.
4. Over the next two to three years, Tech Mahindra plans to invest in infrastructure and market position in key markets, focusing on sales, marketing, and key service lines across strategic verticals like Communications and the BFSI sector.
5. Tech Mahindra's AI strategy is based on four foundational pillars: transformation, productivity, innovation, and assurance, with a focus on local skilling in Tier-2 and Tier-3 cities in India and partnerships with academic institutions.
6. Tech Mahindra's growth strategies reflect a balanced focus on market-specific opportunities, operational agility, and technology-driven differentiation, positioning the company well for growth in the coming financial year.

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