The shares of IT major Tech Mahindra rose more than 3% on Friday following better-than-expected Q1FY27 earnings, supported by revenue growth, healthy deal wins and margin expansion.
The stock rallied 3.41% to the intraday high of Rs. 1562.90 on the NSE. It opened at Rs. 1,540 against the previous day’s close of Rs. 1,511.35. At 12:17 PM, Tech Mahindra shares were trading 1.85% higher at Rs. 1,538.10.
Despite the recent gain, the stock remains 15% below its 52-week high of Rs. 1,850. In 2026, Tech Mahindra stock is down 4.48% and has lost 8.11% over the year.
Tech Mahindra’s consolidated net profit rose 28.4% to Rs. 1,465.1 crore in the June quarter compared with Rs. 1,140.60 crore a year ago. Revenue from operations jumped 15% year-on-year (YoY) to Rs. 15,605.50 crore versus Rs. 13,569.5 crore in the corresponding quarter last year.
Revenue stood at $1.66 billion, up 6.1% YoY and 2.2% sequentially. In constant currency terms, revenue grew 6.6% from last year and 2.6% from the March quarter.
Brokerages say Tech Mahindra's Q1 revenue and margins beat estimates, and a strong deal TCV at $1.08 billion, up 33.3% yearly, provides strong revenue visibility. It is the third straight quarter that it has reported more than a billion-dollar deal wins.
EBIT margin stood at 14.4%, moving closer to the company's FY27 margin target of 15% due to volume growth and operating leverage on Project Fortius.
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Elara Securities has maintained its ‘Accumulate’ rating and revised its target price for the stock upwards from Rs. 1,550 to Rs. 1,620.
"TECHM reiterated its FY27 revenue growth aspiration, targeting growth above the industry's expected 3-5%. We continue to build in around 6%/5% revenue growth in FY27E/FY28E for TECHM on a better outlook for the communications and other verticals," said Elara Securities.
JM Financial has kept its ‘Add’ rating for the stock, raising the target price from Rs. 1,525 to Rs. 1,670 after revising its FY28 and FY29 earnings estimates upward by 4-6%.
"Tech Mahindra continues to execute well both in growth and margins and will be the growth leader among the large tier in FY27. We raise our target multiple to 19x given the healthy order book and better-than-expected Q1 performance," said JM Financial.
Systematix Equities has maintained a ‘Buy’ rating with a target price of Rs. 1,740, as it believes that Tech Mahindra has the potential to outpace peers in the next 2-3 years.
However, 360 One has given a ‘Hold’ rating with a target price of Rs. 1,490. “However, the stock currently trades at a premium of 15-30% to its large-cap peers, which limits major upside from current levels,” it said.