Tech Mahindra is scheduled to announce its December quarter earnings on Friday, January 16, 2026, with analysts expecting continued improvement in profitability and operational margins. The IT services company is projected to deliver strong quarter-on-quarter growth in key financial metrics.

Financial Performance Expectations

The company is expected to report significant improvement in bottom-line performance for Q3FY26. According to analyst estimates, Tech Mahindra's financial metrics are projected to show the following quarter-on-quarter changes:

Margin Expansion Trajectory

Tech Mahindra has demonstrated consistent margin improvement over recent quarters. The company's EBIT margin has shown steady progression over the last six quarters, reflecting operational efficiency improvements and cost optimization measures.

A CNBC TV18 poll suggests constant currency revenue growth of 0.6% quarter-on-quarter, indicating modest revenue expansion while margin improvement is expected to continue.

Forward Guidance and Outlook

For FY27, Tech Mahindra maintains its guidance for growth above the industry average and targets an EBIT margin of around 15%. While growth in FY27 is expected to surpass FY26 levels, it may be muted relative to initial expectations. The company's consistent margin expansion trajectory suggests management's focus on profitability improvement alongside revenue growth.

Market Performance

On Wednesday, January 14, shares of Tech Mahindra ended at ₹1,592.00, down by ₹21.05, or 1.30%, on the BSE. The upcoming earnings announcement will be closely watched by investors for insights into the company's operational performance and future growth prospects.

Mahindra & Mahindra has emerged as Nomura's top automobile sector pick following remarkable booking numbers for its latest SUV launches, while Bajaj Auto faces a more cautious assessment despite expanding its electric vehicle portfolio with an affordable offering.

Strong Market Response Drives Mahindra Optimism

Nomura highlighted the exceptional customer response to Mahindra's dual launch strategy in a research note dated January 14. The refreshed XUV 7XO and all-electric XEV 9S together achieved impressive booking figures, demonstrating strong market appetite for the company's premium SUV offerings.

The brokerage noted that these launches "meaningfully strengthen MM's positioning in the premium SUV space, with competitive pricing and a materially improved feature set supporting demand visibility." Nomura estimates that electric vehicles account for approximately 15% of the combined order book for both models.

Volume Projections and Growth Outlook

Nomura has established specific volume expectations for the new models, projecting monthly sales of 7,500 to 7,800 units for the XUV 7XO in FY26 and FY27, while anticipating 3,000 to 4,000 units monthly for the XEV 9S over the medium term. The brokerage cautioned that the strong initial booking momentum presents an upside risk to these volume assumptions.

Nomura maintains its Buy rating on Mahindra & Mahindra with a target price of ₹4,355.00, compared to the closing price of ₹3,650.00 on January 14.

Bajaj Auto's Affordable EV Strategy Meets Neutral Stance

Despite Bajaj Auto's strategic move to expand its electric vehicle accessibility through the Chetak C25, Nomura maintained a neutral position on the stock. The new variant represents the company's most affordable Chetak offering, targeting price-conscious and first-time EV buyers.

While acknowledging that the launch "lowers the entry price point within the Chetak portfolio, expanding Bajaj's addressable market in the electric scooter segment," Nomura noted that features and boot space have been reduced compared to higher-end variants.

Financial Projections and Market Position

Nomura projects overall volume growth for Bajaj Auto at 10%, 9%, and 6% over FY26, FY27, and FY28 respectively, with EBITDA margins expected at 20.90%, 21.80%, and 21.70%. However, the brokerage highlighted that the stock is already trading at approximately 21.4 times core FY28 earnings, limiting upside potential.

The research house maintained its Neutral rating on Bajaj Auto with a target price of ₹9,814.00, implying minimal upside of 2.40% from the closing price of ₹9,580.00 on January 14. Nomura emphasized that "Ather and TVS continue to be our preferred picks in the 2W space," indicating where it sees better opportunities in the two-wheeler segment.