Tech Mahindra shares jump 3% after Q1 earnings beat estimates. What Nomura, Nuvama, other brokerages now expect
Shares of the company rose to Rs 1,560 apiece after the company on Thursday reported a consolidated net profit of Rs 1,465 crore for the first quarter of the ongoing financial year 2027, marking a 28% year-on-year (YoY) rise from Rs 1,140.6 crore net profit reported in the year-ago period.
Sequentially, the company’s net profit rose over 8% quarter-on-quarter (QoQ) from the Rs 1,353.8 crore reported in the March quarter of FY26. Revenue from operations meanwhile jumped 18% YoY to Rs 15,712 crore in Q1 FY27, from Rs 13,351.2 crore in Q1 FY26.
Tech Mahindra’s revenue rose 6.6% YoY in constant currency (CC) terms to $1,660 million, while EBIT rose over 53% YoY to Rs 15,712 crore during the quarter under review. New deal wins TCV rose over 33% YoY to $1,078 million.
Nomura on Tech Mahindra share price
Nomura noted that Tech Mahindra delivered an all-round beat on estimates in Q1 FY27. Its sequential CC revenue growth of nearly 3% QoQ to $1,660 million beat the international brokerage’s estimate of a mere 1%. growth. The increase was broad-based across all key verticals. EBIT margin at 14.4% was ahead of Nomura’s estimate of 14.1%. Margin expansion was largely driven by the ongoing Project Fortius and currency depreciation, it added.
TechM management noted that it expects the company’s revenue to grow at a faster rate than the industry average in FY27, Nomura highlighted. It added that the ramp-up of two mega deals (in the Telecom vertical) won in H2 FY26 should form a significant portion of its growth in FY27, and Q1 had the benefit of earlier-than- planned execution of a large European automotive program and ramp-up of one of the large telco projects. “The company expects to sustain its growth momentum in Q2 and the whole of FY27, driven by the ramp of the other large telco project and broad-based growth. We raise our growth expectation from 5.1% to 5.9% y-y in USD terms for FY27,” the international brokerage said.
Nomura noted that the key levers for improving margins in FY27E vs FY26 include AI-led productivity gains like converting time and material contracts to fixed price and continued operational efficiencies under program Fortius, as per management. Salary increments will be effected from Q2 in a phased manner.
Saying that Tech Mahindra is now on track to exceed its large-cap peers on growth rates in FY27-28, Nomura increased its target price for the stock to Rs 1,600 apiece from Rs 1,400 apiece, while maintaining its ‘Neutral’ rating. The latest target price implies an upside potential of 6% from the stock’s previous closing price of Rs 1510.3 apiece on NSE.Also read | Tech Mahindra Q1 Results: Net profit rises 28% YoY to Rs 1,465 crore, revenue up 18%
Nuvama on Tech Mahindra share price
Nuvama also highlighted that Tech Mahindra’s earnings beat mostly beat its estimates, although reported profit was slightly below its expectation. “TechM delivered a strong start to FY27 with broad-based growth, continued margin expansion and robust deal-wins, setting the stage for the final phase of its transformational journey,” it said, while upgrading its FY27 and FY28 earnings estimates for the IT services firm.
The brokerage retained its ‘Buy’ rating for the shares of Tech Mahindra, but increased its target price to Rs 1,800 apiece from Rs 1,750 apiece. The latest target price implies an upside potential of nearly 16% from the stock’s previous closing price.
Motilal Oswal on Tech Mahindra share price
Motilal Oswal Financial Services said that Tech Mahindra’s FY27 growth visibility has improved, with margins on track. “We believe this quarter brings a material step-up in Tech Mahindra’s growth trajectory, with growth expectations moving from ~3-5% to ~6-7% over the next couple of years. If this momentum sustains, it could warrant another round of re-rating,” it said.
The domestic brokerage highlighted that in this quarter, Tech Mahindra delivered strong results in a seasonally weak quarter, driven by strength across all key verticals. “We believe this performance puts the company on track to be the fastest-growing company among large-cap IT names in FY27, with ~6-7% growth vs. ~2-3% for most large-cap peers,” it added.
Motilal reiterated its ‘Buy’ call on the shares of Tech Mahindra, naming it its preferred pick among the large cap IT companies. It increased its target price to Rs 1,900 apiece, implying 26% upside potential.
Systematix on Tech Mahindra share price
Systematix Institutional Equities said Tech Mahindra delivered a strong start to FY27, with a material beat on revenues and margins. “The company is well positioned to exceed peer-average growth, supported by a healthy order book, ramp-up of large telecom deals, and strong account mining,” it said, adding that it expects Tech Mahindra to be the fastest-growing among large peers over the next 2–3 years, supporting a premium valuation.
The brokerage maintained its ‘Buy’ rating on the shares of Tech Mahindra, with a target price of Rs 1,740 apiece, implying a 15% upside potential.
Also read | Tech Mahindra’s Q1 profit up 28% to Rs 1,465 crore
Antique Stock Broking on Tech Mahindra share price
Antique Stock Broking said that the tech company began the year on a strong note, with both revenue and margins ahead of estimates, alongside robust deal wins. “Management remains cautiously optimistic about the underlying demand environment amid macro uncertainty and AI-led deflation, but expects to outgrow the peer average in FY27, supported by a growing multi-year deal pipeline, including two large deals in the communications vertical that are set to start contributing from Q2 FY27, and relatively minimal delays in client decision-making,” it said.
The brokerage raised its target price for the shares of the company to Rs 1,475 apiece from Rs 1,375 apiece, while maintaining its ‘Hold’ rating. The latest target price implies a 2% upside potential.
Dolat Capital on Tech Mahindra share price
Dolat Capital meanwhile upgraded its rating on the shares of Tech Mahindra to ‘Accumulate’ with a target price of Rs 1,690 apiece, implying 12% upside potential. “Our confidence in TechM’s ability to deliver on its FY27 roadmap has strengthened following its consistent execution over recent quarters. While macro uncertainties persist and deal conversion remains gradual, the company appears well-positioned to outpace industry growth and progress towards its 15% margin aspiration,” it said.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
