Noida, Oct 16 (APAC Media): Tech Mahindra shares rallied 7% on Friday, October 16, emerging as the top performer on the Nifty 50 index after the IT major posted robust earnings for the second quarter of FY27.
Tech Mahindra’s rally came even as the broader market remained under pressure, with the Sensex and Nifty trading nearly 0.3% lower. The Nifty IT index, however, gained close to 2%, buoyed by buying interest across several heavyweight technology stocks.
The stock climbed as much as 7% to hit an intraday high of ₹1,763.98 per share on the BSE. Among other IT majors, Infosys and Wipro advanced more than 3.6% each, while Tata Consultancy Services (TCS) rose around 3%.
Tech Mahindra posted a 32.7% year-on-year (YoY) growth in consolidated net profit attributable to owners, reaching ₹1,585.6 crore in Q2FY27, up from ₹1,194.5 crore in the same quarter of the previous fiscal year.
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Meanwhile, revenue from operations grew 15.6% year-on-year to ₹16,180.2 crore in Q2FY27, compared with ₹13,994.9 crore in the year-ago period. EBITDA rose 32.8% to ₹2,878.5 crore from ₹2,168 crore in the corresponding quarter of the previous fiscal year.
Tech Mahindra’s board also announced an interim dividend of ₹15 per equity share with a face value of ₹5 for FY27, representing a 300% payout. In addition, the board approved a 1:1 bonus share issue, subject to shareholders’ approval through a postal ballot. Under the proposed issue, eligible shareholders will receive one fully paid-up equity share for every share held.
“Deal wins exceeding $1+ billion in each of the last four quarters reflect the strength of our customer relationships and the trust we have built. With 7.2% year-on-year constant currency growth, we continue to sustain business momentum. As we celebrate our 40th anniversary this quarter, we look ahead with confidence, building on our legacy of innovation, entrepreneurship, and long-term value creation for our stakeholders.” said, ‘Mohit Joshi, MD & CEO, Tech Mahindra.
Check Broking Ratings, Target Prices and Growth Outlook After Q2 Results
Systematix Institutional Equities Rating BUY
Tech Mahindra (TechM) delivered a strong performance, surpassing revenue and margin expectations, supported by broad-based TCV bookings of USD 1,023 million, up 25.4% YoY, thereby mitigating risks associated with vertical concentration. Strategic account expansion and effective execution of large deals reinforce our confidence in the company’s potential to deliver peer-leading growth over the next 2–3 years.
The 15% FY27E EBIT margin target remains achievable due to ongoing operational discipline, while AI-driven productivity gains provide further long-term potential. Project Helix, the SpaceXAI partnership, and TechM’s proprietary AI capabilities further strengthen its AI-led services proposition, although the company expects to disclose AI-led revenue from 2HFY27E. Given its strong growth visibility and improving profitability outlook, we believe TechM’s premium valuation relative to large-cap peers remains justified.
Nuvama Institutional Equities
Tech Mahindra’s four consecutive quarters of deal wins exceeding USD 1 billion position it well to outperform all large-cap peers in growth in FY27. Margins are also expected to trend towards the company’s 15% target. Overall, TechM is poised to deliver a strong earnings CAGR of 25% over the next two years. This robust growth outlook supports a valuation multiple closer to LTIMindtree than to the top-three large-cap IT peers. Accordingly, we expect current valuations to sustain and reiterate our BUY/SO rating.
Dolat Capital Rating BUY
Management expects the core business to remain stable, supported by enterprise applications, data, and AI, while dismissing concerns around AI-led deflation. Under Project Helix, the company plans to disclose AI-led revenue from H2FY27. Key challenges include competitive pricing pressure and rising productivity expectations at contract renewals.
With utilisation nearing peak levels and headcount rising for the first time in four quarters, further operating margin expansion will depend on AI-driven efficiencies in fixed-price projects and continued pyramid rationalisation. As TechM concludes its three-year strategic plan and shifts its focus towards long-term growth, execution on these levers will be critical to achieving its margin targets.
-ENDS–
Disclaimer: This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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