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Tech Mahindra’s share price fell 3 per cent intraday on Thursday to trade lower at Rs 1,418 apiece after brokerages issued mixed calls after the company posted Q4FY26 performance, with revenue growth coming in slightly ahead of expectations and margins showing a meaningful improvement, reflecting early signs of a gradual demand recovery. The IT major reported a 16 per cent year‑on‑year rise in profit, supported by strong deal wins, operating efficiencies, and improving growth across key verticals such as manufacturing, BFSI, and communications. While brokerages like Nuvama remain optimistic on Tech Mahindra’s turnaround and margin trajectory driven by AI‑led investments and a robust deal pipeline, others continue to flag valuation concerns even as the company builds momentum into FY27.
Nuvama on Tech Mahindra
The brokerage maintains ‘Buy’ with target price of Rs 1,750
Q4FY26 revenue grew 0.6 per cent QoQ CC, beating estimates of flat growth
YoY revenue growth stood at 2.4 per cent CC, indicating gradual demand recovery
EBIT margin improved to 13.8 per cent, up 70bps QoQ, ahead of expectations
Deal wins remained strong with TCV at USD 1,073 million, up 34 per cent YoY
Broad-based growth seen across verticals, led by Manufacturing at 11.8 per cent YoY
Telecom stable, BFSI steady, and Hi-tech recovered during second half FY26
Total FY26 deal wins stood at USD 3.8 billion, growing 42 per cent YoY
Continued investments in AI, LLMs, and platforms to support future growth
Strong deal pipeline supports expected earnings CAGR of 23 per cent over next two years
HDFC Securities on Tech Mahindra
The brokerage maintain Add with target price of Rs 1,510 (maintained)
Q4 revenue growth at 0.6 per cent QoQ CC led by BFSI and communications recovery
Strong deal wins with FY26 TCV at USD 3.8 billion
Margin expansion continues with FY26 EBIT margin at 12.6 per cent
AI-led capabilities and large deals to support growth
Targeting better-than-industry growth with 15 per cent EBIT margin in FY27
Value the stock at 17 times FY28E EPS
Goldman Sachs on Tech Mahindra
The brokerage maintains Sell with a target price of Rs 1,410 (revised upward from Rs 1,340)
Q4 performance in line with expectations, with stable growth
Strong deal wins and continued margin improvement
FY27 revenue growth expected at 3.9 per cent
Valuations seen as expensive vs peers despite turnaround
Value the stock at 18 times FY27E P/E
The brokerage maintains Reduce with a target price of Rs 1,450 (Downside 0.9 per cent)
Revenue grew 0.9 per cent QoQ, EBITM expanded to 13.8 per cent
Margins expanded from Project Fortius, currency headwinds and Comviva seasonality
Margins partly negated by investments in AI and transition costs
Deals intake remain strong
Management targets FY27 peer outperformance via broad-based growth, strong deal momentum, and strategic AI and consulting investments.
Expects margin expansion in FY27 to be driven by a combination of continued cost takeout and operating leverage as revenue growth accelerates.
The brokerage has reduced its earnings per share estimates for FY26 and FY27 by 1.7 per cent and 1.5 per cent, respectively, after factoring in the company’s Q4 FY26 performance.
Tech Mahindra reported a 16 per cent year-on-year increase in its consolidated profit after tax (PAT) to Rs 1,354 crore for the January-March quarter. The company’s revenue from operations rose 13 per cent YoY to Rs 15,076 crore. Sequentially, the PAT increased 20.7 per cent while the revenue rose 4.7 per cent.
EBIT (Earnings Before Interest and Taxes) came in at Rs 2,084 crore in Q4 FY26 against Rs 1,892 crore reported in the previous quarter, marking a growth of 10.2 per cent QoQ. EBIT Margin improved 70bps QoQ to 13.8 per cent in Q4 FY26 vs 13.1 per cent in Q3 FY26.
Tech Mahindra Q4FY26 Result Highlights
- Profit – Rs 1,354 cr in Q4 FY26 vs RS 1,122 cr in Q4FY25, up 20.7 per cent QoQ
- Revenue- Rs 15,076 cr in Q4 FY26 vs Rs 14,393 cr in Q4 FY25, up 4.7 per cent QoQ
- EBIT – Rs 2,084 cr in Q4 FY26 vs Rs 1,892 cr in Q4 FY25, up 10.2 per cent QoQ
- EBIT Margin – 13.8 per cent in Q4 FY26 vs 13.1 per cent in Q4 FY25, up 70 bps QoQ
- Total headcount at 147,623; down 1,108 YoY
- LTM IT attrition at 12.1%
- Days of Sales Outstanding 89 days
- Cash and Cash Equivalent at the end of the quarter Rs 8,456 crores
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
