TECHM

Adds reporters' bylines

By Sai Ishwarbharath B and Haripriya Suresh

BENGALURU, Aug 8 (Reuters) - Indian outsourcing giant Tata Consultancy Services' TCS.NS decision to cut over 12,000 jobs signals the start of a broader AI-fueled trend that could end up eliminating around half a million jobs over the next two to three years from the $283 billion sector, experts said.

While TCS pegged the move to shed 2% of its workforce to skill mismatches rather than AI-related productivity gains, experts viewed the largest-ever layoffs by India's top private employer as the beginning of things to come in the labour-intensive sector. Roughly 12,200 TCS middle and senior management jobs will be lost.

The industry, which has played a crucial role in creating a middle class in India, is increasingly seeing AI being used for everything from basic coding to manual testing and customer support.

The sector employed 5.67 million people as of March 2025 and accounted for over 7% of India's GDP. It has a huge multiplier effect due to the direct and indirect jobs it creates and the cars-to-homes consumption it drives in the world's fifth-largest economy.

It has historically absorbed a majority of India's engineers but that will change as rising AI use ekes out more efficiencies and demands newer skills that many current employees lack, according to half a dozen industry veterans, analysts, and staffing firms.

"We are in the midst of a massive transition that will transform white-collar work as we know it," said Silicon Valley-based Constellation Research founder and chairman Ray Wang, echoing other experts who warned that more layoffs are likely on the cards.

The most vulnerable employees include pure people managers with minimal tech knowledge, those in charge of testing or identifying bugs and ensuring user-friendliness before delivering software to clients, and infrastructure management staff who provide basic tech support and ensure networks and servers are working well, experts said.

"About 400,000 to 500,000 professionals are at risk of being laid off over the next two to three years as their skills don't match client demands," tech market intelligence firm UnearthInsight's founder Gaurav Vasu said, adding that about 70% of those layoffs would impact workers with 4-12 years' experience.

"This (fear stemming from TCS layoffs) may hurt consumer demand for tourism, luxury shopping and even delay long-term investments such as real estate," Vasu said.

TCS and its peers Infosys INFY.NS, HCLTech HCLT.NS, Tech Mahindra TEML.NS, Wipro WIPR.NS, LTIMindtree LTIM.NS, and Cognizant CTSH.O collectively employ over 430,000 workers with 13 to 25 years of experience, according to staffing firm Xpheno.

"At the moment, they may appear like the big fat middle layer," Xpheno's co-founder Kamal Karanth said. None of the IT firms responded to Reuters queries seeking comment.

"With cost optimization being the key driver for new deal wins, clients are asking for productivity benefits - a trend which is also growing due to the rise in AI adoption. This requires IT firms to do more work with the same number of employees or the same work with fewer employees," Jefferies analyst Akshat Agarwal said in a research note.

ADAPT OR PERISH

TCS, which had more than 613,000 workers before the layoffs, said in its late July announcement it was gearing up to be "future-ready" by investing in new technologies, entering new markets, deploying AI at scale for its clients and itself, and realigning its workforce model. It did not answer Reuters queries on how many layoffs were tied to AI adoption and why it could not redeploy the affected employees.

"This is very devastating news," said a 45-year-old, Kolkata-based TCS employee affected by the latest layoffs. "It is very difficult for people my age to get new jobs."

Some others who are still at TCS fretted over its mediocre performance bonuses for senior employees in recent quarters, a new "bench policy" that limits the time somebody could be without a project regardless of personal circumstances or past performance, on-boarding delays, and the emotional turmoil caused by the layoffs.

"All these developments have tanked the morale of mid-career folks like me," a Pune-based TCS employee said.

The Indian outsourcing sector has been a key employment engine since the 1990s, offering upward mobility to millions of engineers. But revenue growth has weakened recently as its clients, stung by inflation and U.S. tariff uncertainty, defer discretionary spending and demand better cost management.

"The tech industry is at an inflection point, as AI and automation move to the very core of how businesses operate," industry body Nasscom said.

During past tech revolutions, disruption was felt at the organisational level.

"With AI, for the first time, the onus is on the individual to reinvent or re-skill themselves," former Tech Mahindra CEO CP Gurnani said.

(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Dhanya Skariachan and Kim Coghill)

(([email protected]))

BENGALURU, July 23 (Reuters) - India's Infosys INFY.NS narrowed its forecast for the current fiscal year on Wednesday, after posting bigger-than-expected first-quarter revenue on a boost from Europe market.

The Bengaluru-based firm changed its annual forecast to 1%-3% from the flat-to-up-3% range announced in the previous quarter.

Analysts were largely expecting the firm to lift the bottom end of the range to 1%.

The company's consolidated sales rose 7.5% year-on-year to 422.79 billion rupees ($4.89 billion) in the June quarter.

Analysts, on average, expected 418.06 billion rupees, as per data compiled by LSEG.

($1 = 86.3880 Indian rupees)

(Reporting by Sai Ishwarbharath B ; Editing by Nivedita Bhattacharjee )

(([email protected];))

** India's fifth-largest IT services firm by revenue, Tech Mahindra TEML.NS, drops 1.5% to 1,583.4 rupees in pre-open trade

** Co marginally missed first-quarter revenue estimates as sales in its Americas market posted steepest decline in nearly five years

** At least 11 brokerages out of 41 covering the stock reduced rating on the stock, while 10 cut price targets - data compiled by LSEG

** Mohit Joshi, CEO at Tech Mahindra said the market is very, very volatile and added that the company is seeing a continued slowdown in the auto and manufacturing products

** Stock down ~7% so far in 2025

(Reporting by Manvi Pant in Bengaluru)

(([email protected]; +918447554364;))

BENGALURU, July 16 (Reuters) - India's Tech Mahindra TEML.NS reported a marginally lower-than-expected first-quarter revenue on Wednesday as clients tightened non-essential spending amid tariff-related uncertainty.

Consolidated sales at India's fifth largest IT services firm by revenue rose 2.7% year-on-year to 133.51 billion rupees ($1.55 billion) in the June quarter.

Analysts, on average, expected 133.83 billion rupees, as per data compiled by LSEG.

($1 = 85.9340 Indian rupees)

(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Janane Venkatraman )

(([email protected];))

June 26 (Reuters) - Pininfarina SpA PNNI.MI:

• TECH MAHINDRA AND PININFARINA SIGN 6 MILLION EURO FINANCING AGREEMENT

• FINANCING TO LAST 12 MONTH

Further company coverage: PNNI.MI

(Reporting by Gdansk Newsroom)

(([email protected]; +48587696600;))

** Tech Mahindra, India's No. 5 IT services firm, missed analysts' estimates for fourth-quarter revenue on Thursday

** Stock down 2%, pulling back from from initial decline of 4%

FISCAL 2027 TARGET APPEARS "STEEP"

** Emkay Global ("add"; PT: 1,600 rupees) says TEML's Q4 results were a "mixed bag" as margins showed slight improvement but revenue was a miss, adding that prolonged macro risks pose risk to management's turnaround plans by FY27

** Morgan Stanley ("equal-weight", PT: 1,550 rupees) says TEML's Q4 miss is not "material negative" as most large-cap peers missed Q4 estimates, but co may push FY27 goals due to macro uncertainty and that it requires "flawless execution" to achieve these goals

** Nuvama ("reduce", PT: 1,300 rupees) says TEML "plucked low-hanging fruits" with modest growth in Q4, however, co's FY27 target still appears a "tall ask"

** Brokerage adds, while delivering better-than-industry average growth might appear closer, due to the industry average itself coming down, it will make margin expansion difficult

(Reporting by Kashish Tandon in Bengaluru)

(([email protected]))

April 24 (Reuters) - Tech Mahindra Ltd TEML.NS:

• TECH MAHINDRA UNVEILS 'AI DELIVERED RIGHT': A COMPREHENSIVE STRATEGY TO HELP ENTERPRISES SCALE AI WITH PURPOSE AND PRECISION

Source text: ID:nPre7Xbmla

Further company coverage: TEML.NS

(([email protected];))

Corrects syntax in paragraph 1

By Haripriya Suresh

BENGALURU, April 4 (Reuters) - India's $283-billion IT sector should brace for a rough year ahead as tariffs are likely to stoke inflation in its key U.S. market and force clients to cut spending, analysts said.

Although President Donald Trump did not impose direct tariffs on IT services, Indian firms are expected to feel the heat as clients, especially in manufacturing, logistics and retail sectors, adjust to the new levies.

That could slow deal cycles, delay existing projects and hurt revenue growth, analysts said. Bernstein and ICICI Securities rushed to cut their ratings on the Indian IT sector soon after the tariff announcement.

The tariffs come at a time the sector was counting on Trump to revive client confidence and discretionary spending after years of weak revenue growth.

The U.S. accounts for more than half of India's $190 billion software exports, making the sector sensitive to shifts in spending confidence among businesses in the world's largest economy. J.P.Morgan on Friday lifted global and U.S. recession odds to 60% after Trump's tariff announcement.

"With a rising risk of U.S. recession and uncertain decision-making, we think chances of fiscal 2026 being a complete washout are rising," J.P. Morgan said in a note on Friday, without giving specific numbers.

At least six analysts expect Indian IT firms to issue a "conservative" annual revenue growth forecast when quarterly results start next week.

Companies with a greater exposure to discretionary spending are expected to bear the brunt of any tariff-fueled slowdown.

"Discretionary IT spend will likely see an impact across the industry verticals. Companies to get impacted will typically be the high-growth companies in the large caps and some of the mid-caps where the exposure usually is much higher on the discretionary side," BNP Paribas analyst Kumar Rakesh said.

He added the impact of a potential slowdown could be apparent by the September quarter.

India's Nifty IT index .NIFTYIT fell 3.6% on Friday to take its losses for the week to 9.15%, the steepest weekly fall for the index in more than five years.

(Reporting by Haripriya Suresh; Editing by Dhanya Skariachan, Sonia Cheema and Saumyadeb Chakrabarty)

(([email protected];))

April 3 (Reuters) - ServiceNow Inc NOW.N:

• TECH MAHINDRA AND SERVICENOW PARTNER TO DELIVER NEXT-GEN BROADBAND SOLUTIONS FOR COMMUNICATION SERVICE PROVIDERS

  
  

Source text: ID:nPn2qyRvla

Further company coverage: NOW.N

(([email protected];))

** Shares of Tech Mahindra TEML.NS rise 2% to 1,423.45 rupees apiece

** TEML is the top percentage gainer in IT index .NIFTYIT which is up 0.5%

** J.P.Morgan upgrades TEML to "neutral" from "underweight", citing likely margin expansion in an environment of subdued growth

** J.P. Morgan says macro uncertainty in the U.S. will weigh on March quarter earnings in the sector

** Brokerage downgrades HCLTech HCLT.NS to "neutral" from "overweight", citing likely weak March quarter results, soft deal wins

** HCLT shares down 0.7% on the day

** TEML shares are down 18.2% in 2025 so far, HCLT sheds 20% compared to Nifty IT's 16.5% drop

(Reporting by Bharath Rajeswaran in Bengaluru)

(([email protected]; +91 9769003463; ))

Feb 28 (Reuters) - Tech Mahindra Ltd TEML.NS:

• TECH MAHINDRA LTD - APPROVES MERGER OF COMVIVA USA WITH COMVIVA AMERICAS

Source text: ID:nBSE1PkG54

Further company coverage: TEML.NS

(([email protected];))

Feb 18 (Reuters) - Tech Mahindra Ltd TEML.NS:

• APPROVES MERGER OF WHOLLY-OWNED SUBSIDIARIES

Source text: ID:nBSE6dX802

Further company coverage: TEML.NS

(([email protected];;))

Jan 20 (Reuters) - Wipro's shares WIPR.NS surged about 8% on Monday, set for their best day in nearly four years, after India's No. 4 IT services company joined its peers in signaling a revival in demand.

The company beat third-quarter revenue and profit estimates on Friday and CEO Srinivas Pallia said, "We see discretionary spending slowly coming back" after facing macroeconomic challenges in 2024.

Wipro's shares were also among the top percentage gainers on the benchmark Nifty 50 .NSEI index, which was trading flat. At least eight brokerages raised their rating on Wipro's stock, while 16 raised their price targets, as per LSEG data.

"Wipro is witnessing a pick up in discretionary spends in its BFSI (banking, financial services and insurance) segment - evident from 11% y/y growth in revenue," Jefferies analysts said in a note, raising both their rating and price target.

The BFSI segment accounts for about a third of the company's revenue.

Wipro's bet of a more promising 2025 echoed similar indications from larger peers TCS TCS.NS, Infosys INFY.NS and HCLTech HCLT.NS.

India's $254 billion IT services sector has faced sluggish growth for several quarters due to global macroeconomic uncertainties and inflationary pressures, which have pushed clients to rein in spending.

($1 = 86.4390 Indian rupees)

(Reporting by Manvi Pant in Bengaluru; Editing by Savio D'Souza)

(([email protected]; +918447554364;))

Jan 17 (Reuters) -

• TECH MAHINDRA EXEC: FOCUSSED ON IMPROVING GROWTH CAPABILITIES

• TECH MAHINDRA EXEC: REVENUE MIX TO MEET FY27 GROWTH TARGET

• TECH MAHINDRA EXEC: STEEP CURRENCY MOVEMENTS IMPACTED REPORTED NUMBERS IN QUARTER

• TECH MAHINDRA EXEC: DESPITE CHALLENGES IN AUTOMOTIVE SECTOR, SEE OPPORTUNITIES

• TECH MAHINDRA EXEC: SEEING MOMENTUM IN SERVICENOW PRACTICE

• TECH MAHINDRA EXEC: CLIENT ADOPTION OF SERVICENOW PLATFORM BOOSTED BY AI INTEREST

• TECH MAHINDRA EXEC: GROWTH IN Q3 WAS LED BY BFSI, COMMUNICATIONS SEGMENTS

• TECH MAHINDRA EXEC: AREAS OF INVESTMENT INTEREST INCLUDE GENAI TOOLS, PARTNERSHIPS

• TECH MAHINDRA EXEC: WE WILL HAVE TO DEPLOY MULTIPLE LEVERS IF CURRENCY SITUATION MOVES ONE WAY OR OTHER

• TECH MAHINDRA EXEC: IN MEDIUM-TO-LONG TERM, HAVE WELL-DIVERSIFIED REV STREAMS

Further company coverage: TEML.NS

(([email protected];;))

Dec 20 (Reuters) - Tech Mahindra Ltd TEML.NS:

• TECH MAHINDRA LTD - YABX TECHNOLOGIES ENTERS AGREEMENT WITH SC VENTURES AND FURAHA HOLDINGS

• TECH MAHINDRA - YABX ACQUIRES 1.2 MILLION ORDINARY SHARES, 1.8 MILLION C ORDINARY SHARES OF FURAHA

Source text: ID:nBSE4zqQyT

Further company coverage: TEML.NS

(([email protected];))

By Haripriya Suresh

BENGALURU, Dec 20 (Reuters) - India's Tech Mahindra TEML.NS is stepping up focus on its banking, financial services and insurance (BFSI) business in a bid to bridge the gap with larger peers which have historically made more revenue from the lucrative segment, its CEO said in an interview.

Mohit Joshi, who took the helm of India's No.5 software services exporter in December 2023 after more than two decades at Infosys INFY.NS, wants to increase the share of BFSI in Tech Mahindra's revenue mix by up to 25% by March 2027, from about 16% currently.

Some of Tech Mahindra's peers in the $254 billion Indian IT sector already make as much as a third of their revenue from this sector.

"We still have a lot of room to catch up," said Joshi, who started out as a banker with ABN Amro and ANZ before joining Infosys. "I do expect that the relative share of BFSI revenue within TechM will increase, but...organically."

Unlike its peers, Tech Mahindra has relied heavily on telecom clients to boost revenue. That will change as Joshi tries to take advantage of his own expertise and experience dealing with financial services firms to turn the company around.

"BFSI is the single largest spender from a tech services perspective. It's very important for us to play aggressively in this space. Large banks typically spend over $10 billion a year in terms of technology," Joshi said.

Tech Mahindra, which has lagged its peers in both revenue and profit, will focus on core banking, payments, asset and wealth management and custodian services, as well as insurance, he said. Joshi has already shored up its BFSI leadership.

GENERATIVE AI

Generative artificial intelligence is a friend and not a foe for the sector, according to Joshi.

"GenAI is the best spokesperson for why we need more money to be spent on technology," he said, adding it is not the end of the road for software developers.

"I do feel that the overall demand for developers is not going to reduce, because there is a lot more work to be done candidly than there are people just now."

Joshi played down concerns about any potential hit to customer service roles at Tech Mahindra.

"I'm very skeptical about whether we'll see a wholesale replacement of contact centers with GenAI because when it comes to critical issues, people prefer to speak with human beings."

(Reporting by Haripriya Suresh; Editing by Dhanya Skariachan and Varun H K)

(([email protected]))

Dec 11 (Reuters) - Tech Mahindra Ltd TEML.NS:

• ANNOUNCES MERGER OF EVENTUS SOLUTIONS GROUP WITH TECH MAHINDRA (AMERICAS)

Source text: ID:nBSE36HJYv

Further company coverage: TEML.NS

(([email protected];;))

Dec 2 (Reuters) - Tech Mahindra Ltd TEML.NS:

• APPROVES MERGER OF WHOLLY-OWNED SUBSIDIARIES

• PLAN OF MERGER OF TWO SUBSIDIARIES OF ALLYIS INC USA HAS BEEN APPROVED

Source text: ID:nBSE4TbmFB

Further company coverage: TEML.NS

(([email protected];;))

** Shares of India's Tech Mahindra TEML.NS climb ~3% to 1729 rupees

** IT firm's revenue rose 1.9% YoY, 0.7% sequentially

** Growth of 0.7% QoQ ahead of our estimate (0.3%); believe co on path of recovery with gradual turnaround underway - Antique

** Brokerage maintains "buy" rating; hikes PT to 1,875 rupees from 1,725 rupees

** Q2 results were "encouraging with revenue beat surprising positively," says Jefferies, but maintains "underperform" on rich valuations

** Co rated "hold" on an average - LSEG data

** TEML top pct gainer in Nifty IT index .NIFTYIT, which is flat on the day

** YTD stock has jumped ~36% vs 18% gains in NIFTYIT

(Reporting by Hritam Mukherjee in Bengaluru)

(([email protected];))

** IT services firm Tech Mahindra TEML.NS rises 3.3% to 1,629 rupees, making it the top Nifty 50 .NSEI gainer

** CLSA upgrades to "outperform" from "hold", hikes TP to 1,749 rupees, citing likely expansion in profit margin

** Adds focus on BFSI, healthcare, manufacturing indicates more balanced industry mix with reduced telecom reliance

** Says the company's 15% EBIT margin target by FY27 is unambitious due to levers like offshoring, subcontracting

** Overall, analysts' avg rating on TEML is the equivalent of "hold"; median PT is 1,553 rupees -LSEG data

** TEML now up ~28% YTD, top performer on IT index .NIFTYIT which is up ~19%

(Reporting by Yagnoseni Das in Bengaluru)

(([email protected];))

Sept 24 (Reuters) - Tech Mahindra Ltd TEML.NS:

• MITSUBISHI UFJ FINANCIAL GROUP SOLD AN INDIRECT INTEREST IN TECH MAHINDRA

• MUFG HAS 2.96% STAKE IN TECH MAHINDRA AS ON SEPTEMBER 19

• MUFG SOLD 2.05% STAKE IN TECH MAHINDRA

Source text for Eikon: ID:nBSE7ZrlHz

Further company coverage: TEML.NS

(([email protected];))

** Shares of IT services firm Tech Mahindra Ltd TEML.NS end 1.5% lower at 1,604.65 rupees

** Stock biggest loser on blue-chip Nifty 50 .NSEI index and among IT stocks .NIFTYIT

** CLSA downgrades TEML to "hold" from "outperform", citing near-term stress in telecom, its biggest segment

** Tepid pace of 5G rollout as well as lack of cost saving deal announcements in recent months vs multiple deal wins by rivals among factors for downgrade - CLSA

** Brokerage adds TEML stock's YTD outperformance vs IT stocks and limited upside has resulted in stretched valuations

** Analysts on average rate TEML "hold", in line with most stocks on 10-member Nifty IT index

** TEML stock trims YTD gains to 26.4%, remains second-best performer on IT index

(Reporting by Nandan Mandayam in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))

July 25 (Reuters) - Tech Mahindra Ltd TEML.NS:

• TECH MAHINDRA Q1 CONSOL NET PROFIT 8.51 BILLION RUPEES; IBES EST. 8.77 BILLION RUPEES

• TECH MAHINDRA Q1 CONSOL REV FROM OPS 130.05 BLN RUPEES; IBES EST. 129.45 BLN RUPEES

• TECH MAHINDRA Q1 NET NEW DEAL WINS $534 MILLION

Source text for Eikon: [ID:]

Further company coverage: TEML.NS

(([email protected];))

Corrects paragraph 13 to say large order bookings are contract wins above $50 mln, not $100 mln

By Sai Ishwarbharath B and Haripriya Suresh

BENGALURU, July 18 (Reuters) - Infosys INFY.NS topped quarterly results estimates on Thursday as a recovery in demand from clients in its mainstay financial services business helped, prompting India's second-largest IT services firm to raise its yearly revenue forecast.

U.S.-listed shares of the Bengaluru-based company rose as much as 5.1% as of 1240 GMT.

"We had a very strong first quarter that is specifically focussed on volumes of financial services in the US," Chief Executive Salil Parekh said at a post-earnings conference.

"Large deals in the quarter also gave us more visibility of what we are seeing for the full year."

Infosys expects revenue growth of 3%-4% in the fiscal year 2025, up from its prior view of 1%-3%.

The company joined industry leader Tata Consultancy Services TCS.NS and smaller rival HCLTech HCLT.NS in reporting a strong quarter, raising hopes for the $254 billion sector which has been struggling with sluggish demand post a pandemic-induced boom.

"There is a recovery at play after five to six quarters of depressed spending," Investec analyst Nitin Padmanabhan told Reuters.

Consolidated revenue in the first quarter rose 3.6% to 393.15 billion rupees ($4.70 billion), beating the analysts' average estimate of 389.15 billion rupees, as per LSEG data.

Its banking and financial services posted a revenue rise of 0.3% after falling for four straight quarters.

IT clients had cut their spending on non-essential projects in recent quarters amid economic uncertainty and higher interest rates. Analysts expect that to change after the US Federal Reserve cuts interest rates and that nation's election outcome is out.

Net profit at Infosys rose 7.1% to 63.68 billion rupees in the quarter ended June, beating the analysts' average estimate of 62.53 billion rupees, as per LSEG data.

Operating margin rose 30 basis points year-on-year to 21.1% on better pricing.

Large order bookings - or contract wins above $50 million - came in at $4.1 billion for the quarter, against $4.5 billion in the fourth quarter and $2.3 billion a year ago.

The company also said it plans to hire 15,000-20,000 fresh graduates in the current fiscal year.

(Reporting by Sai Ishwarbharath B; Editing by Dhanya Skariachan and Nivedita Bhattacharjee)

(([email protected]))

June 25 (Reuters) - Tech Mahindra Ltd TEML.NS:

• PLAN OF MERGER OF UNIT HEALTHNXT INC. WITH ITS PARENT COMPANY TECH MAHINDRA (AMERICAS) HAS BEEN APPROVED

Further company coverage: TEML.NS

(([email protected];))

By Sai Ishwarbharath B

BENGALURU, May 22 (Reuters) - Mid-tier firms in India's $254 billion information technology sector took market share from industry goliaths in recent quarters as clients curtailed discretionary spending amid inflationary pressures and economic uncertainty, analysts said.

Unlike their larger rivals such as Tata Consultancy Services TCS.NS and Infosys INFY.NS, mid-tier IT firms tend to focus on short-term deals aimed at helping clients cut costs rather than chase large-scale projects.

The practice has paid off in an environment of slowing demand in prominent markets such as North America and Europe.

LTIMindtree LTIM.NS, Coforge COFO.NS, Mphasis MBFL.NS and Persistent Systems PERS.NS are "increasingly viewed as challengers in (winning) Fortune 500 accounts, aiding the share gain process," Kotak Institutional Equities said.

The smaller companies could outperform their larger rivals further once discretionary spending improves, Kotak analysts Kawaljeet Saluja, Sathishkumar S and Vamshi Krishna said.

This should set the mid-tier IT firms up well as they try to win more budget-conscious clients in an economic backdrop where U.S. interest rates are expected to stay "higher for longer". Industry body Nasscom estimated overall revenue growth more than halved to 3.8% last financial year.

"In the current macro environment, clients are increasingly looking at service providers (that) deliver services at lower and predictable costs with better business outcomes," said Avinash Baliga, partner at consulting firm Avasant.

Persistent Systems CEO Sandeep Kalra and Mphasis CFO Manish Dugar confirmed the market share gains. India's larger IT firms did not respond to Reuters' requests seeking comment.

"We are able to hold our own and win against the larger piers as clients are looking for competency and not scale," Dugar told Reuters.

The market share of India's top five IT firms fell 17 basis points in 2023, reflecting the inroads made by the mid-tier IT firms, according to BNP Paribas data shared exclusively with Reuters. However, the top five IT firms still owned 88.35% of the market as of December 2023 among the top 10 firms.

On the stock market, share prices of Mphasis and Persistent Systems advanced 23.7% and 42.5% respectively in the last 12 months compared to a 16% gain in the broader Nifty IT Index.

In April, Infosys forecast fiscal 2025 revenue growth between 1% and 3% in constant currency terms, while most analysts had expected it to be at least in the range of 2% to 5%.

"Due to the sheer size they have reached, larger players have given muted guidance," said Ashok Soota, founder of mid-tier IT firm Happiest Minds Technologies HAPP.NS , which also gained market share. "We need to be humble about this as (our) market share is (relatively) small on the grand total."

(Reporting by Sai Ishwarbharath B; Editing by Dhanya Skariachan and Shri Navaratnam)

(([email protected];))

** Shares of Tech Mahindra TEML.NS up 1.9% to 1,303.35 rupees

** Stock among top pct gainers on benchmark Nifty 50 index .NSEI, which is up 0.3%

** Brokerage Morgan Stanley double-upgrades TEML stock to "overweight" from "underweight", raises PT to 1,490 rupees from 1,190 rupees, CNBC-TV18 reports

** Rating change follows TEML announcing its three-year turnaround plan aimed at increasing revenue and doubling operating margin; however, Q4 rev missed estimates

** Stock hit 8-year high on Friday post results; expansion plan in focus for analysts

** Avg PT among analysts now at 1,260.8 rupees compared to 1,301.21 rupees a month earlier - LSEG data

** Avg rating by analysts is "hold"; stock is fifth-most expensive stock with a fwd 12-mth PE of 25 on the 10-member Nifty IT index .NIFTYIT

(Reporting by Varun Vyas in Bengaluru)

(([email protected]))

BENGALURU, April 26 (Reuters) - Tech Mahindra TEML.NS shares jumped 13.2% on Friday, their biggest intraday gain in nearly eight years, after India's No.5 IT company announced a turnaround plan that offered succour following declining revenue growth for the past three quarters.

The stock was up 8.6% at 1,292.25 rupees as of 11.48 a.m. IST, leading gains on the Nifty IT index .NIFTYIT, which was up 1.8%.

Including the day's move, Tech Mahindra is up 2% so far this year compared with a 4% fall in the IT index. Larger rival Infosys INFY.NS was down 6.8%, while Tata Consultancy Services TCS.NS was up 2.2%.

The Pune-based Tech Mahindra laid out a three-year plan on Thursday, aimed at increasing revenue and doubling operating margin to 15% by fiscal 2027. The company reported a fall in revenue between 2% to 6.2% in rupee terms in the last three quarters, including the March quarter.

Brokerages welcomed the company's turnaround plan, with HSBC writing, "The new transformation plan looks quite sensible - acknowledging the need (for) investment in sales and to manage costs to expand margins. However, we believe the path to this turnaround is going to be challenging, at best."

However, execution remained a concern. "While management's plan is comprehensive, its execution amidst a weak demand environment carries risk," Jefferies said.

Market leader Tata Consultancy Services TCS.NS missed revenue estimates, although it said a strong deal pipeline will drive growth this fiscal year.

At least 13 analysts cut their target price for Tech Mahindra, while two raised after the results, with the median price target falling to 1,289.50 rupees from 1,320.50 rupees in March, as per LSEG estimates.

(Reporting by Sai Ishwarbharath B; Editing by Janane Venkatraman )

(([email protected];))

Recasts paragraph 1, adds details on company's three-year turnaround plan in paragraph 4, 5

Bengaluru, April 25 (Reuters) - Tech Mahindra TEML.NS, India's fifth-largest software company, reported fourth-quarter revenue below analysts' estimates on Thursday and unveiled a three-year turnaround plan.

Consolidated revenue fell 6.2% year-on-year to 128.71 billion rupees ($1.55 billion) in the January-March quarter. Analysts, on average, expected revenue of 129.55 billion rupees, as per LSEG data.

The communications and media segment, which contributes to a third of its overall revenue, saw a 16.5% decline.

The company also laid out a three-year plan aimed at increasing revenue and doubling operating margin to 15% by fiscal 2027.
The plan, which involves hiring more freshers, increasing automation and reducing subcontracting expenses, will help save $250 million annually.

Stubbornly high inflation and geopolitical risks have pushed clients to cut down on discretionary tech spending.

The Pune-based company's net profit fell about 41% to 6.61 billion rupees, missing analysts' average estimate of 7.57 billion rupees.

Earlier this month, market leader Tata Consultancy Services TCS.NS posted a lower-than-expected revenue, although it said a strong deal pipeline will drive growth this fiscal year.

The Mahindra group company's net new deal bookings stood at $500 million, compared with $382 million in the previous quarter and $592 million in the year-ago period.

Brokerage Jefferies, in a post-earnings research note, said the company's fourth-quarter results did not have any "meaningful surprises", while the net new deals were "uninspiring".

"This is the year of turnaround, so you should expect to see volatility ... we expect to come back fully to growth by the second half of the (fiscal) year," said CEO Mohit Joshi, adding the decline in the communications vertical was on account of macro headwinds.

This is the first full quarter under Joshi's leadership, who took over in December.

($1 = 83.3028 Indian rupees)

(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing by Janane Venkatraman, Eileen Soreng, Sohini Goswami and Tasim Zahid )

(([email protected];))