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Informist, Friday, Apr. 17, 2026

 

By Arya S. Biju

 

MUMBAI – Enhancement of operational and cost efficiencies through Project Fortius and a sharp depreciation of the rupee against the dollar may help Tech Mahindra report a sequential rise of over 7% in its bottom line for the March quarter. This follows a sequential fall in its consolidated net profit for the trailing quarter owing to a one-time impact from the implementation of new labour codes. Execution of deals won in previous quarters and strong sales from its largest vertical, communications, is expected to support the company's top line for the reporting quarter. However, the rise may be limited by weakness in other verticals and productivity pass-through, according to brokerages.

 

The information technology services and consulting company is expected to report a consolidated net profit of INR 14.98 billion for the March quarter, according to the average of estimates from 18 brokerages. This indicates a sequential rise of 7.5%, the highest in 2025-26 (Apr-Mar), and an on-year rise of over 28%.

 

The company's consolidated revenue for the quarter is expected to rise nearly 3% on a sequential basis and around 11% on year to INR 148.12 billion, according to the average of 18 estimates. This would be in line with the near 3% sequential rise reported in the trailing quarter.

 

The highest estimate for net profit was INR 17.49 billion from Nomura Equity Research and the lowest estimate was INR 12.70 billion from Anand Rathi Share and Stock Brokers Ltd. Equirus Securities Pvt. Ltd. had the highest estimate for the company's top line at INR 150.87 billion and Elara Securities (India) Pvt. Ltd. had the lowest estimate of INR 146.61 billion.

 

Analysts are divided on revenue growth in constant currency terms, with some expecting it to remain largely flat on a sequential basis and others seeing a rise of 0.3-2.1%. ICICI Securities Ltd., on the other hand, expects the company to report a 0.3% sequential fall in revenue in constant currency terms due to an impact of $1 million-$2 million from the West Asia conflict and lower-than-expected positive seasonality of the Comviva business. Comviva Technologies Ltd. is Tech Mahindra's mobility solutions arm. Tech Mahindra has less than 5% exposure to West Asia, ICICI Securities said.

 

In contrast, Nirmal Bang Equities Pvt. Ltd. expects the company to deliver 2.1% sequential growth in revenue in constant currency terms, citing broad-based growth across verticals and reversal of the impact of furloughs in the previous quarter. Nuvama, however, expects the company's revenue to remain largely flat on a sequential basis as gains from growth in communications and banking, financial services, and insurance verticals may be offset by other verticals.

 

The company's earnings before interest and tax margin for the quarter is expected to expand by 20-70 basis points to 13.3-13.8%, estimates from 13 brokerages showed. This will mark the tenth successive quarter of margin expansion. Benefits from the company's cost optimisation programme, Fortius, which closed in the March quarter, coupled with depreciation of the rupee against the dollar are expected to support the margin for the reporting quarter, according to analysts. Under the Fortius plan, Tech Mahindra aimed to achieve an operating margin of 15% by FY27. The rupee depreciated 5.5% against the dollar in the March quarter, against a depreciation of over 1% in the trailing quarter.

 

The technology services provider is expected to report healthy deal wins for the March quarter, with total contract value estimated between $600 million and over $1 billion, according to six brokerages. While JM Financial Institutional Securities Pvt. Ltd., Nomura Equity Research, Kotak Securities Ltd., and ICICI Securities expect the company's new deals wins in the reporting quarter to be worth around $1 billion, Nirmal Bang Equities  and Prabhudas Lilladher Pvt. Ltd. expects them to be in the range of $600 million to $900 million.

 

Tech Mahindra will announce its March quarter earnings Wednesday. Market participants will watch out for the management's commentary on demand trends across verticals, 2026 technology budgets of US-based clients, and the potential impact of the continuing geopolitical uncertainties on discretionary spending and decision making by clients. The commentary on potential revenue impact from artificial intelligence-led disruptions and measures identified to negate this impact will also be closely watched, analysts said.

 

Furthermore, the Street will monitor changes in the company's talent strategy and hiring plans amid increased adoption of AI. Management comments on revenue and margin guidance for FY27 and updates on deal wins and the deal pipeline will also be in focus, analysts said.

 

For FY26, Tech Mahindra is expected to report a consolidated revenue of INR 565.11 billion, up around 7% on year, according to the average of estimates from four brokerages. Its EBIT margin for the full year is expected to be 12.5-12.6%, estimates from six brokerages showed. In FY25, the company had reported an EBIT margin of 9.7%.

 

Friday, shares of Tech Mahindra closed over 1% higher at INR 1,511.40 on the National Stock Exchange. The stock is down over 9% since the company reported its results for the December quarter on Jan. 16 and down over 18% from its all-time high of INR 1,854, recorded on Feb. 3.

 

Of the 17 research reports on the company available with Informist, 12 have a "buy" or equivalent recommendation on the stock while three have a "hold" call and two say "sell". The average target price of the "buy" recommendations is INR 1,860, up 23% from Friday's closing price.

 

Following are the March quarter earnings estimates, in INR billion, for Tech Mahindra from 18 brokerage firms in descending order of the estimate of net profit:

Brokerage	Net Sales	Net Profit	EBITDA	Revenue ($ mln)	?IT margin
Nomura Equity Research	147.89	17.49	--	2.67	13.5
Nirmal Bang Equities Pvt. Ltd.	149.38	16.31	--	--	13.5
ICICI Securities Ltd.	148.15	15.82	--	1.61	13.5
Nuvama Wealth Management Ltd.	147.84	15.81	--	1.62	13.5
Prabhudas Lilladher Pvt. Ltd.	147.80	15.80		1.62	13.5
YES Securities (India) Ltd.	148.40	15.21	24.91	--	--
Indsec Securities and Finance Ltd.	147.00	15.20	--	1.58	13.5
Dolat Capital Market Pvt. Ltd.	147.28	15.19	--	1.64	13.4
Motilal Oswal Financial Services Ltd.	148.37	15.12	25.07	--	--
Equirus Securities Pvt. Ltd.	150.87	14.98	25.78	1.63	13.8
HDFC Securities Ltd.	146.97	14.77	--	1.61	13.7
JM Financial Institutional Securities Pvt. Ltd.	148.20	14.72	25.12	1.62
Centrum Broking Ltd.	147.14	14.70	--	--	13.6
Elara Securities (India) Pvt. Ltd.	146.61	14.33	--	1.61	--
Emkay Global Financial Services Ltd.	149.25	14.32	25.22	1.62	--
IDBI Capital Market Services Ltd.	147.78	14.19	--	1.62	13.3
Kotak Securities Ltd.	149.44	13.02	--	1.62	13.7
Anand Rathi Share and Stock Brokers Ltd.	147.87	12.70	24.88	1.62	13.5
Average	148.12	14.98	25.16	1.69	--

 

End

 

US$1 = INR 92.9250

 

Edited by Tanima Banerjee

 

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