Tech Mahindra up 7% after Q2 results, dividend, bonus shares announced- Buy, sell or hold? Check target prices, ratings
Shares of IT stock Tech Mahindra surged 7% on Friday, October 16, making the IT stock the top gainer on the Nifty 50 index after the company reported strong September-quarter results for FY27 (Q2FY27).
The rally came amid a weak broader market, with the Sensex and Nifty trading around 0.2% lower. The Nifty IT index advanced nearly 2%, supported by gains across major IT stocks.
Tech Mahindra added as much as 7% to its day's high of ₹1,763.95 per share on BSE.
Infosys and Wipro rose over 3.5% each, while Tata Consultancy Services (TCS) gained around 3%. L&T Technology Services, Mphasis, LTIMindtree and HCL Technologies also traded higher, while Persistent Systems fell over 4% and Coforge declined.
Tech Mahindra shares are now around 5% below their 52-week high of ₹1,850, recorded in February 2026. The stock had touched a 52-week low of ₹1,304.25 in March.
Tech Mahindra reported a 32.7% year-on-year (YoY) increase in consolidated net profit attributable to owners to ₹1,585.6 crore in Q2FY27, compared with ₹1,194.5 crore in the corresponding quarter last year.
Revenue from operations rose 15.6% YoY to ₹16,180.2 crore from ₹13,994.9 crore. EBITDA increased 32.8% to ₹2,878.5 crore from ₹2,168 crore a year earlier.
The company's board declared an interim dividend of ₹15 per equity share of face value ₹5 for FY27, equivalent to 300%. It also approved a 1:1 bonus issue, subject to shareholder approval through a postal ballot. Under the proposal, eligible shareholders will receive one fully paid-up equity share for every existing equity share held.
Management highlighted sustained business momentum, supported by deal wins exceeding $1 billion in each of the last four quarters and YoY constant-currency revenue growth of 7.2%. It also pointed to continued margin expansion, disciplined execution and investments in artificial intelligence (AI).
“Deal wins exceeding $1 billion in each of the last four quarters reflect the strength of our customer relationships and the trust we have built,” CEO and Managing Director Mohit Joshi said.
Chief Financial Officer Rohit Anand said the company had delivered margin expansion for the twelfth consecutive quarter, reflecting disciplined execution. He added that AI investments would help improve productivity, drive innovation and build capabilities for future growth.
Tech Mahindra expanded its AI initiatives across telecom, software engineering, enterprise transformation, cybersecurity and industrial automation during the quarter.
The company launched Zero Gravity Telco Architecture to help telecom operators deploy AI agents and transition to AI-native operations. It also partnered with SpaceXAI to develop an AI-powered software engineering practice and launched Indus Terra, a 30-billion-parameter educational large language model, with Nvidia and AWS under the IndiaAI Mission.
Other initiatives included the Consumer Agentic Experience Studio with Google, SAP and Blue Yonder, and an expanded Google Cloud collaboration that introduced hands-on Gemini workshops for more than 12,500 employees worldwide.
The company also strengthened its enterprise AI capabilities through a partnership focused on scaling deployments using ServiceNow's AI Platform. Additional collaborations included AI-driven cybersecurity solutions with Cisco, manufacturing automation with Wandelbots, agentic commerce with Rezolve Ai and enterprise AI solutions with Uniphore.
Brokerages offered mixed views on Tech Mahindra, with some seeing further recovery potential while others remained cautious about sustaining revenue growth and margin expansion.
Kotak has a buy call on the IT stock and raised its target price to ₹1,870 from ₹1,750, saying the second-quarter performance confirmed that Tech Mahindra's turnaround strategy was working. The brokerage expects improving execution and demand recovery across key verticals to support growth. It also sees further headroom for margin improvement as operational efficiency initiatives continue to deliver benefits.
Meanwhile, Jefferies upgraded Tech Mahindra to 'Hold' from 'Underweight' and increased its target price to ₹1,540 from ₹1,260. The brokerage believes the company's growth outlook is improving and its turnaround is becoming more visible. It expects revenue to grow at a 6% constant-currency compound annual growth rate (CAGR), while earnings per share could rise at a 12% CAGR over FY27-FY29. However, it cautioned that a stronger focus on growth could slow margin expansion beyond the current fiscal year.
Choice Broking also assigned an 'add' rating to Tech Mahindra with a target price of ₹1775.
“We expect continued cost discipline and AI-led productivity gains to support gradual margin expansion, enabling TECHM to achieve its 15.0% target in H2FY27, despite near-term wage and deal ramp-up cost,” it added.
However, Nirmal Bang Securities was bearish on the IT stock. It maintained its 'Sell' rating on Tech Mahindra and set a target price of ₹1,222, citing challenges in sustaining revenue growth and margin expansion amid evolving AI-led industry dynamics.
“We reiterate our ‘SELL’ rating on Tech Mahindra, as sustaining revenue growth and margin expansion remains challenging amid evolving AI-led industry dynamics,” Nirmal Bang said. The brokerage also remained 'Underweight' on the IT sector for FY27, citing generative AI-led pricing and growth pressures.
Pranati Deva is a seasoned financial journalist with over a decade of experience in high-pressure newsroom environments, currently working as a Senior Sub Editor at LiveMint. Over the years, she has developed a reputation for sharp editorial judgement, a strong grasp of market dynamics, and the ability to translate complex financial developments into clear, engaging stories for a wide audience. <br><br> Her core areas of coverage include stock markets, leading listed companies, currencies, and commodities, with a particular strength in fast-paced, real-time market reporting. She is known for handling breaking market news, earnings-driven stock movements, and macroeconomic developments with speed, accuracy, and context—qualities that are essential in financial journalism. <br><br> Pranati has built a diverse and credible professional track record across some of India’s most respected news organisations, including MintGenie, CNBC-TV18, Business Standard and EconomicTimes.com. During her stints at these platforms, she produced data-driven market stories, curated and steered live blogs during volatile trading sessions, and conducted interviews with market veterans, fund managers, economists, and industry experts. Her work often combines on-ground reporting with analytical depth, helping readers make sense of daily market fluctuations and longer-term trends. An alumnus of the Symbiosis Institute of Media and Communications and Hansraj College, University of Delhi, Pranati brings a strong academic foundation to her journalism. She specialises in real-time financial reporting, with a keen focus on precision, balance, and insight, aiming to decode market movements in a way that is both informative and accessible to readers across experience levels.
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