Tech Mahindra Q2 revenue rises profit misses forecast
Tech Mahindra posted second-quarter FY27 revenue of $1.7 billion, marking a 2.4% rise quarter-on-quarter in constant currency and surpassing the brokerage’s 1.7% growth estimate. The company highlighted that the figure reflects stronger client spending despite a competitive market.
Retail, communication and technology segments grew 9.6%, 6.0% and 2.8% respectively, while the “others” and manufacturing lines fell 15.0% and 3.9% in USD terms. Analysts observed that the mixed performance shows a shift toward higher-margin services.
Ebit margin expanded by 40 basis points to 14.8%, outpacing the estimate of 14.4%. This improvement was attributed to better cost control and higher pricing power in select contracts.
Adjusted PAT reached Rs 1,600 crore, up 8.2% quarter-on-quarter and 32.8% year-on-year, though it fell short of the forecasted Rs 1,700 crore. The shortfall was linked to slower growth in the “others” segment.
Net new deal total contract value was $1,023 million, a 5.1% decline from the prior quarter but a 25.4% increase from a year earlier.
In rupee terms, revenue, EBIT and adjusted PAT grew 16.6%, 46.4% and 30.6% year-on-year in the first half of FY27. The broker projects an 11.7% revenue rise, 28.7% EBIT growth and 44.7% PAT increase for the second half, suggesting a strong finish to the fiscal year.
Motilal Oswal reiterated a “Buy” rating, setting a target price of Rs 1,950, implying about an 18% upside from the current market price of Rs 1,650. The analyst team emphasized confidence in the company’s strategic initiatives.
The brokerage values the company at 20 times FY28 estimated earnings per share, positioning it as a preferred pick among large-cap technology stocks. This multiple reflects expectations of continued earnings expansion.
Analysts note the firm is approaching its FY27 EBIT margin goal of 15%, a benchmark that could reinforce its standing as a growth leader among peers.
