Tech Mahindra shares jump 3% after Q1 earnings beat estimates. What Nomura, Nuvama, other brokerages now expect

Published 17 July 2026 · finance

Shares of Tech Mahindra jumped over 3% on Friday after the IT services company released its results for the April-June quarter of FY27, beating estimates

Shares of Tech Mahindra jumped over 3% on Friday after the IT services company released its results for the April-June quarter of FY27, beating estimates and prompting brokerages to raise their target prices for the stock.Shares of the company rose to Rs 1,560 apiece after the company on Thursday reported a consolidated net profit of Rs 1,465 crore for the first quarter of the ongoing financial year 2027, marking a 28% year-on-year (YoY) rise from Rs 1,140.6 crore net profit reported in the year-ago period. Sequentially, the company’s net profit rose over 8% quarter-on-quarter (QoQ) from the Rs 1,353.8 crore reported in the March quarter of FY26. Revenue from operations meanwhile jumped 18% YoY to Rs 15,712 crore in Q1 FY27, from Rs 13,351.2 crore in Q1 FY26.Tech Mahindra’s revenue rose 6.6% YoY in constant currency (CC) terms to $1,660 million, while EBIT rose over 53% YoY to Rs 15,712 crore during the quarter under review. New deal wins TCV rose over 33% YoY to $1,078 million.Nomura on Tech Mahindra share priceNomura noted that Tech Mahindra delivered an all-round beat on estimates in Q1 FY27. Its sequential CC revenue growth of nearly 3% QoQ to $1,660 million beat the international brokerage’s estimate of a mere 1%. growth. The increase was broad-based across all key verticals. EBIT margin at 14.4% was ahead of Nomura’s estimate of 14.1%. Margin expansion was largely driven by the ongoing Project Fortius and currency depreciation, it added.TechM management noted that it expects the company’s revenue to grow at a faster rate than the industry average in FY27, Nomura highlighted. It added that the ramp-up of two mega deals (in the Telecom vertical) won in H2 FY26 should form a significant portion of its growth in FY27, and Q1 had the benefit of earlier-than- planned execution of a large European automotive program and ramp-up of one of the large telco projects.

“The company expects to sustain its growth momentum in Q2 and the whole of FY27, driven by the ramp of the other large telco project and broad-based growth. We raise our growth expectation from 5.1% to 5.9% y-y in USD terms for FY27,” the international brokerage said.Nomura noted that the key levers for improving margins in FY27E vs FY26 include AI-led productivity gains like converting time and material contracts to fixed price and continued operational efficiencies under program Fortius, as per management. Salary increments will be effected from Q2 in a phased manner.Saying that Tech Mahindra is now on track to exceed its large-cap peers on growth rates in FY27-28, Nomura increased its target price for the stock to Rs 1,600 apiece from Rs 1,400 apiece, while maintaining its ‘Neutral’ rating. The latest target price implies an upside potential of 6% from the stock's previous closing price of Rs 1510.3 apiece on NSE.Also read | Tech Mahindra Q1 Results: Net profit rises 28% YoY to Rs 1,465 crore, revenue up 18%Nuvama on Tech Mahindra share priceNuvama also highlighted that Tech Mahindra’s earnings beat mostly beat its estimates, although reported profit was slightly below its expectation. “TechM delivered a strong start to FY27 with broad-based growth, continued margin expansion and robust deal-wins, setting the stage for the final phase of its transformational journey,” it said, while upgrading its FY27 and FY28 earnings estimates for the IT services firm.The brokerage retained its ‘Buy’ rating for the shares of Tech Mahindra, but increased its target price to Rs 1,800 apiece from Rs 1,750 apiece. The latest target price implies an upside potential of nearly 16% from the stock’s previous closing price.Motilal Oswal on Tech Mahindra share priceMotilal Oswal Financial Services said that Tech Mahindra’s FY27 growth visibility has improved, with margins on track.