Mahindra EPC Irrigation Ltd delivered exceptional financial performance in Q3FY26, reporting remarkable profit growth that drove its stock price up by approximately 5%. The micro-irrigation systems company, a subsidiary of Mahindra & Mahindra Ltd, announced results showing a 1,411% quarter-on-quarter net profit increase, demonstrating strong operational recovery.

The company's stock reached an intraday high of ₹137, representing a 4.70% increase from the previous close of ₹131. With a market capitalization of ₹363 crores, Mahindra EPC Irrigation has delivered a compounded annual return of 39% over the past three years, reflecting consistent long-term performance in the agricultural technology sector.

Q3FY26 Financial Performance

The company's quarterly results showcased strong growth across key financial metrics. Revenue from operations demonstrated solid expansion both year-on-year and quarter-on-quarter, while profitability showed exceptional improvement.

The revenue growth of 15% year-on-year demonstrates the company's ability to expand its market presence, while the 86% quarter-on-quarter revenue increase reflects strong seasonal performance typical in the agricultural sector.

Nine-Month Performance Highlights

The company's nine-month performance for FY26 has been particularly impressive, with profits already surpassing the previous fiscal year's annual performance. This early achievement indicates strong momentum for the remainder of the fiscal year.

The ₹7.90 crore profit in 9MFY26 has exceeded the previous fiscal year's annual profit of ₹7.20 crore by approximately 10%, demonstrating accelerated profitability growth.

Operational Efficiency Improvements

Mahindra EPC Irrigation has achieved significant operational improvements, particularly in margin expansion. The company's operating profit margin (OPM) showed remarkable enhancement, rising from 2.70% in September 2025 to 11.19% in Q3FY26, representing an increase of 847 basis points.

The company maintains strong long-term growth fundamentals with a three-year profit CAGR of 44%, while sales CAGR for the same period stands at 9%. Despite the strong performance, the company trades at a PE ratio of 23, compared to the industry average of 31, suggesting potential valuation attractiveness.

Business Profile and Sector Context

Mahindra EPC Irrigation Ltd, headquartered in Nashik, Maharashtra, was incorporated in 1986 and operates in the micro-irrigation systems sector. The company's product portfolio includes:

• Drip and sprinkler irrigation systems
• Agricultural pumps
• Greenhouses
• Landscape products

As an agricultural sector company, Mahindra EPC Irrigation experiences seasonal business variations due to weather patterns and monsoon timing. These factors commonly result in stronger performance in the third quarter compared to earlier quarters, as agricultural activity typically peaks during this period. The company's exceptional Q3 performance aligns with typical seasonal patterns while demonstrating superior execution and market positioning.

Anand Rathi has reaffirmed its positive outlook on Tech Mahindra, maintaining a BUY rating with a target price of ₹1,964. The brokerage firm highlighted the company's robust performance in Q3FY26, despite it being a traditionally challenging furlough quarter for the IT services sector.

Strong Financial Performance in Q3FY26

Tech Mahindra delivered impressive results across key financial metrics during the quarter. The company's performance demonstrates resilience and operational efficiency in a competitive market environment.

Business Segment Performance

The company's diversified business portfolio showed varied performance across segments. IT services maintained steady growth momentum, while the BPO division benefited from seasonal factors.

Segment-wise Growth Analysis

Major Contract Wins and Future Pipeline

A significant highlight of the quarter was Tech Mahindra securing a substantial European telecom modernization contract. This deal represents a major validation of the company's capabilities in the telecom sector.

Growth Outlook and Strategic Focus

Anand Rathi expects multiple sectors to contribute to Tech Mahindra's future growth trajectory. The research firm identified key areas where the company's expertise positions it well for sustained expansion:

• Telecom sector: Leveraging expertise across the telecom value chain, including networks, software through Comviva, and BPS business
• BFSI segment: Expected to provide meaningful contribution to growth
• Manufacturing: Anticipated to drive business expansion
• Retail sector: Positioned for continued growth contribution

Investment Recommendation

The brokerage firm's target price of ₹1,964 implies an expected P/E ratio of 23.6x for FY28. Anand Rathi noted that Tech Mahindra has effectively addressed previous market concerns about its growth prospects through exceptional performance across growth, margin, and TCV metrics in Q3FY26.

The research report emphasized that the company's performance in the quarter demonstrates its ability to deliver consistent results even during traditionally challenging periods, reinforcing confidence in its operational capabilities and strategic direction.