Tech Mahindra Ltd. will report its Q2 FY26 results on Oct 14, and analysts expect a modest improvement in operating performance, with profit seen up 13% quarter-on-quarter and margins largely stable despite higher costs and subdued demand in the communications segment.
The focus will be on the company's progress in its turnaround plan, particularly in communications and BFSI, where management is aiming to stabilise growth and lift profitability. The H-1B visa fee hike, which imposes a $100,000 charge on new petitions, is also likely to feature in management commentary, given its potential impact on operating costs for Indian IT firms such as Tech Mahindra, one of the largest visa users in the industry.
Brokerages expect revenue growth between 0.7% and 0.8% in constant currency terms, driven by steady deal ramp-ups and stable performance in the communications vertical. Analysts see sequential growth supported by improved execution of large deals and traction in enterprise, banking and retail segments, though the telecom business is expected to remain flat. Deal wins are projected in the range of $600 million to $800 million for the quarter, according to Jefferies and Nomura.
Margin is expected to expand modestly, with most analysts projecting gains of 40–90 basis points from cost optimisation and currency tailwinds. HSBC expects margin support from rupee depreciation, while Goldman Sachs and InCred see benefits from operating leverage and efficiency initiatives. Headcount is likely to remain flat as the company focuses on utilisation and cost control.
Tech Mahindra Q2 Preview (Consolidated, QoQ) (Bloomberg Estimates)
Revenue seen 3% higher at Rs 13,778 crore versus Rs 13,351 crore
Profit seen 13% higher at Rs 1,285 crore versus 1,141 crore
EBIT seen 9% higher at Rs 1,609 crore versus Rs 1,477 crore
EBIT margin seen at 11.67% versus 11.06%
Here's what analysts are expects from Tech Mahindra Q2 results:
Goldman Sachs | Stock Rating: Sell | Price Target: 1,380
Revenue growth expected to improve sequentially in Q2, supported by momentum in deal wins.
Large deals have shown an improving trend, which analysts will continue to monitor.
EBIT margin expected to improve quarter-on-quarter due to cost efficiencies and better topline performance.
Headcount likely to remain flat sequentially.
Jefferies | Stock Rating: Underperform | Price Target: Rs 1,315
Revenues expected to rise 0.8% quarter-on-quarter in constant currency, aided by the ramp-up of large deals.
Cross-currency tailwind expected to be about 80 basis points.
Margins likely to expand by 90 basis points, supported by currency benefits and cost efficiencies.
Deal wins expected in the range of $600 million to $800 million.
Focus areas include turnaround progress, growth in communications and BFSI, and the impact of the H-1B visa fee hike on margin guidance.
InCred | Stock Rating: Add | Price Target: Rs 1,908
Constant currency revenue growth seen at 0.8%, led by stability in telecom and traction in financial services and retail.
EBIT margin expected to expand, supported by growth, operating efficiency, and leverage benefits.
Key monitorables include FY26 revenue and margin outlook, organisational restructuring updates, and commentary on the communications and enterprise businesses.
Nomura | Stock Rating: Buy | Price Target: Rs 1,660
Revenue expected to grow 0.7% quarter-on-quarter in constant currency, driven by both communications and enterprise verticals.
Net new deal wins projected at about $600 million to $800 million.
EBIT margin likely to rise by 40 basis points, reflecting ongoing cost optimisation efforts.
Analysts will watch commentary on demand trends in banking and telecom, large deal closures, and margin improvement targets for FY27.
HSBC | Stock Rating: Buy | Price Target: Rs 1,770
Telecom business expected to remain stable, with growth led by non-telecom segments such as banking and manufacturing.
Dollar revenue expected to grow 0.8% quarter-on-quarter, while margins are likely to improve by about 60 basis points, aided partly by rupee depreciation.
Focus areas include margin expansion roadmap, client technology spending in communications, and performance of BFSI and manufacturing divisions.
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