Tech Mahindra shares gain 3% after Q1 results; Nomura upbeat on FY27 outlook, Jefferies sees strong deal momentum

Tech Mahindra shares jumped as much as 3.4% to touch an intraday high of ₹1,562.90 apiece on Friday, July 17, a day after the country’s fifth-largest IT services firm reported its earnings for the first quarter of the current fiscal year (Q1 FY27).

At 10:45 AM, Tech Mahindra shares were trading at ₹1,535.80 apiece on the National Stock Exchange, gaining 1.69%. From the beginning of the year, the stock has tumbled 4.4%.

With a market capitalisation of ₹1.51 lakh crore, Tech Mahindra shares have jumped 5% in a month’s time.

The IT firm reported a consolidated net profit of ₹1,465 crore for the quarter ended June 30, 2026 (Q1 FY27), rising 8.2% sequentially from ₹1,354 crore in Q4 FY26. On a year-on-year (YoY) basis, it registered a growth of 28.4%.

Its revenue from operations surged 4.2% on a quarter-on-quarter (QoQ) basis to ₹15,712 crore during the quarter under review, compared to ₹15,076 crore in the March quarter of the 2025-26 fiscal year (Q4 FY26).

On an annual basis, the large-cap IT services company’s revenue jumped 17.6% from ₹13,351 crore in the first quarter of FY26.

At an operational level, its EBIT (earnings before interest and taxes) stood at ₹2,264 crore, registering a growth of 9.2% QoQ from ₹2,073 crore. The EBIT margin also increased 70 basis points (bps) to 14.4% in Q1 FY27 in contrast to 13.7% recorded in the previous quarter of FY26.

In constant currency terms, the revenue jumped up 2.6% QoQ and 6.6% annually at $1,660 million.

Tech Mahindra reported free cash flow of $167 million for the period. The company also recorded new deal wins with a total contract value (TCV) of $1,078 million, marking a 33.3% year-on-year increase.

“YoY growth of 6.1% coupled with three consecutive quarters of deal wins exceeding $1 billion underscores the resilience of our business and the growing relevance of our offerings. Equally encouraging is the continued deepening of client relationships, with our $50 million-plus client base up by seven and all verticals delivering growth YoY,” said Mohit Joshi, CEO and Managing Director, Tech Mahindra.

Here’s what analysts said post earnings

Analysts at Morgan Stanley noted that Tech Mahindra reported a strong revenue beat in the first quarter, supported by robust deal wins. They highlighted management commentary indicating sustained business momentum heading into Q2, alongside a reaffirmation of the company’s EBIT margin outlook for FY27.

The analysts added that near-term valuation multiples may hold steady, reflecting the current growth visibility. However, they flagged a potential risk of de-rating over time if EBIT margins begin to normalise from current levels.

Nomura analysts said Tech Mahindra delivered a beat across all parameters in Q1 FY27, indicating a stronger-than-expected operational performance. They noted that the company remains on track to achieve its stated FY27E goals, supported by the current trajectory.

They further highlighted that Tech Mahindra is now positioned to exceed its large-cap peers on growth rates over FY27–28F. Reflecting this improved outlook, the analysts raised the target valuation multiple to 18x from 16x earlier.

Jefferies said Tech Mahindra’s Q1 revenues and margins came in ahead of their estimates, while profits were largely in line with expectations. The analysts highlighted that strong deal wins provide visibility for growth and position the company to deliver around 6% constant currency revenue growth in FY27.

They added that FY27–29 EPS estimates have been raised by 6–8% following the Q1 performance, with strong deal wins and improving margins expected to support 4% and 9% CAGRs in constant currency revenues and EPS, respectively, over the period. However, they noted that valuations remain rich at around 20x PE.