Tech Mahindra Q2FY27 results: Net profit rises 32.7% YoY to ₹1,586 crore
- Net profit rose 32.7% YoY to ₹1,586 crore in Q2FY27
- Revenue grew 15.6% YoY to ₹16,180 crore; EBIT beat estimates at ₹2,387 crore
- Board declared ₹15 per share interim dividend and recommended 1:1 bonus issue
- New deal wins TCV reached $1,023 million, up 25.4% YoY
*this image is generated using AI for illustrative purposes only.
Tech Mahindra reported a 32.7% year-on-year increase in consolidated net profit to ₹1,586 crore for the second quarter of FY27, driven by margin expansion and steady revenue growth.
The IT services major’s revenue from operations stood at ₹16,180 crore, marking a 15.6% YoY rise and a 3.0% QoQ increase. In constant currency terms, revenue grew 7.2% YoY. The company’s EBIT rose 40.5% YoY to ₹2,387 crore, with margins expanding to 14.8%, up approximately 260 bps from the same period last year. Analyst estimates for EBIT stood at ₹2,320 crore, indicating a beat of ₹67 crore.
Dividend and Bonus Issue Announcements
The Board of Directors declared an interim dividend of ₹15 per equity share (face value ₹5), representing a 300% payout. The record date for this dividend is October 23, 2026, with payment scheduled by November 13, 2026.
Additionally, the Board recommended a 1:1 bonus issue, granting one new fully paid-up equity share for every existing share held. This proposal is subject to shareholder approval via postal ballot. The authorized share capital will be increased from ₹924.3 crore to ₹1,000 crore to accommodate the issuance, which is valued at up to ₹4.9 billion.
Deal Wins and Operational Highlights
Tech Mahindra secured new deal wins with a Total Contract Value (TCV) of $1,023 million, a 25.4% YoY increase. This brings the Last Twelve Months (LTM) deal wins to $4,270 million, up 34.8% YoY. Key engagements include partnerships with a leading Canadian insurer for application managed services and a global logistics company for AI adoption strategies.
The company’s total headcount stood at 152,206, with IT attrition at 11.7% on an LTM basis. Free cash flow was reported at $135 million, with Days Sales Outstanding (DSO) at 88 days.
What the Numbers Show
A divergence exists between reported INR revenue growth (15.6% YoY) and constant currency growth (7.2% YoY). The significant gap is primarily attributable to currency tailwinds, as the average USD/INR rate moved from 88.2 in Q2FY26 to 95.5 in Q2FY27. While the rupee’s depreciation boosted reported earnings in domestic terms, the underlying operational momentum remains anchored in the mid-single-digit constant currency growth range.
| Metric | Q2FY27 | Q2FY26 | Change |
|---|---|---|---|
| Revenue (₹ crore) | 16,180 | 13,995 | +15.6% |
| Revenue ($ mn) | 1,693 | 1,586 | +6.8% |
| EBIT (₹ crore) | 2,387 | 1,699 | +40.5% |
| EBIT Margin (%) | 14.8% | 12.1% | +260 bps |
| Net Profit (₹ crore) | 1,586 | 1,195 | +32.7% |
| Diluted EPS (₹) | 17.84 | 13.46 | +32.5% |
| New Deal Wins TCV ($ mn) | 1,023 | 816 | +25.4% |
Historical Stock Returns for Tech Mahindra
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +4.75% | +10.66% | +7.07% | +14.95% | +12.40% | +15.32% |
How might the proposed 1:1 bonus issue impact Tech Mahindra's share price liquidity and trading volume in the post-record date period?
To what extent can Tech Mahindra sustain its 260 bps EBIT margin expansion without relying on further currency tailwinds, given the mid-single-digit constant currency growth?
What are the potential revenue contribution timelines and margin implications from the newly secured AI adoption and application managed services deals?
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