Tech Mahindra Share Price took a hit, dropping over 2% after its Q1 FY26 results missed market expectations. Despite a 34% profit surge, revenue dips and margin concerns have investors on edge. Dive into the latest updates, expert opinions, and what’s next for this IT giant. Should you buy, sell, or hold? Find out now!

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Tech Mahindra Share Price: A Rollercoaster Ride After Q1 FY26 Results

Tech Mahindra, one of India’s leading IT services companies, has been making headlines in the stock market following its Q1 FY26 earnings release on July 16, 2025. The company’s share price experienced a sharp decline of over 2% on July 17, 2025, trading at around ₹1,578.90 on the NSE, positioning it among the top losers on the Nifty 50 index. This drop comes despite a robust 34% year-on-year (YoY) increase in net profit to ₹1,141 crore, driven by strong deal wins worth $809 million, up 51% YoY. However, a 1.4% sequential revenue decline and concerns over margins have left investors cautious. Let’s break down the latest developments, market reactions, and what lies ahead for Tech Mahindra.

Q1 FY26 Performance: A Mixed Bag

Tech Mahindra reported a consolidated net profit of ₹1,140.6 crore for the April-June 2025 quarter, a significant 33.95% jump from ₹851.5 crore in the same period last year. Revenue from operations rose 2.7% YoY to ₹13,351.2 crore, supported by growth in the communications and banking, financial services, and insurance (BFSI) sectors. The company’s EBIT margin expanded by 260 basis points to 11.1%, reflecting operational improvements through its Project Fortius program. Additionally, deal wins surged to $809 million, with a last-twelve-month (LTM) total contract value (TCV) up 44%, signaling strong client confidence.

However, the results fell short of market expectations, with Bloomberg estimating a net profit of ₹1,195.1 crore and revenue of ₹13,422.3 crore. A 1.4% sequential revenue decline in constant currency terms highlighted ongoing softness in client spending, particularly in discretionary areas. The company also reduced its headcount by 622 employees, bringing the total to 79,987, as part of its workforce optimization efforts. Attrition stood at 12.6% on a trailing 12-month basis, slightly up from 11.8% in the previous quarter.

Stock Market Reaction and Analyst Perspectives

Following the earnings announcement, Tech Mahindra’s share price opened at ₹1,583.40 on July 17, down from its previous close of ₹1,607.90, and fell to an intraday low of ₹1,572.30, a 2.21% decline. The stock’s performance reflects investor disappointment with the revenue miss and concerns about future margin growth in a challenging macroeconomic environment.

Brokerages have mixed views on Tech Mahindra’s outlook:

• Nomura maintained a “Buy” rating with a target price of ₹1,810, suggesting a potential 15% upside. They highlighted strong deal wins and an optimistic medium-term transformation plan, despite the Q1 shortfall.
• Emkay retained a “Reduce” rating with a target price of ₹1,600, citing rich valuations and muted demand. They noted that achieving the company’s FY27 target of a 15% EBIT margin could be challenging.
• Nuvama also issued a “Reduce” rating with a target price of ₹1,300, trimming FY26 and FY27 earnings estimates by less than 2.5% due to margin concerns.
• Motilal Oswal set a more optimistic target of ₹2,000, implying a 26.54% upside, driven by confidence in the company’s turnaround under new leadership and steady execution.
• Morgan Stanley maintained an “Underweight” rating with a target price of ₹1,555, acknowledging strong deal wins and margin improvements but expressing concerns over weak deal-to-revenue conversion and a tough manufacturing sector outlook.

Posts on X reflect similar sentiment, with some users noting the stock’s pressure due to lagging growth compared to peers, while others highlight the positive aspects of deal wins and margin stability.

Tech Mahindra Share Price

Here’s a snapshot of Tech Mahindra’s financial performance for Q1 FY26 compared to previous periods:

Metric	Q1 FY26 (June 2025)	Q1 FY25 (June 2024)	Q4 FY25 (March 2025)
Revenue (₹ Crore)	13,351.2	13,005.5	13,384.0
Net Profit (₹ Crore)	1,140.6	851.5	1,143.1
EBIT Margin (%)	11.1	8.5	9.62
Earnings Per Share (₹)	12.83	9.58	12.86
Headcount	79,987	80,609	80,609
Deal Wins ($ Million)	809	534	798

The table shows steady revenue growth YoY but a sequential dip, with profitability improvements driven by cost optimization and strategic deals.

Strategic Wins and Future Outlook

Tech Mahindra’s deal pipeline remains a bright spot, with $809 million in new contracts secured across the US, UK, and Japan. Notable deals include a multi-year engagement with a global fashion brand for digital and data transformation and a partnership with a US-based consumer wireless operator as a “growth partner.” The company also set up a Shared Services Center for a UK-based manufacturer, enhancing its IT and business process services.

CEO Mohit Joshi emphasized the company’s focus on operational efficiency and strategic partnerships, stating, “Even in an uncertain environment, our Project Fortius program continues to generate meaningful results.” The company’s FY25 total deal wins reached $2.7 billion, a 42.5% YoY increase, laying a strong foundation for future growth.

However, challenges remain. The IT sector faces headwinds from reduced discretionary spending and macroeconomic uncertainties, including potential US trade policy changes under a new administration. Analysts suggest that a lower-than-expected tariff rate (e.g., 15% instead of 20%) could trigger a rally in IT stocks, but clarity is needed.

Dividend and AGM Updates

Tech Mahindra did not announce a dividend for Q1 FY26 but had previously declared a final dividend of ₹30 per share (600%) for FY25, in addition to an interim dividend of ₹15 per share, totaling ₹45 per share. The company’s Annual General Meeting (AGM) is scheduled for July 18, 2025, and investors are eager for insights into its strategic roadmap and margin improvement plans.

Should You Buy, Sell, or Hold?

The mixed brokerage outlook reflects the uncertainty surrounding Tech Mahindra. Optimists point to strong deal wins, margin expansion, and leadership-driven transformation, while pessimists highlight revenue softness and margin challenges. The stock’s year-to-date performance shows a 7% decline, underperforming the Nifty 50’s 6% gain but aligning with the Nifty IT index’s 13% drop.

For long-term investors, Tech Mahindra’s focus on digital transformation and AI expansion could drive growth, especially if macroeconomic conditions stabilize. Short-term traders may find the current volatility a chance to buy on dips, particularly if the stock nears support levels around ₹1,550, as flagged by analysts.

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FAQs About Tech Mahindra Share Price

1. Why did Tech Mahindra’s share price fall on July 17, 2025?
The share price dropped over 2% due to a 1.4% sequential revenue decline and Q1 FY26 results missing Bloomberg estimates, raising concerns about growth and margins.

2. What were Tech Mahindra’s Q1 FY26 financial highlights?
The company reported a 34% YoY net profit increase to ₹1,141 crore, revenue of ₹13,351.2 crore (up 2.7% YoY), and deal wins of $809 million, up 51% YoY.

3. What are brokerages saying about Tech Mahindra?
Brokerages are divided: Nomura and Motilal Oswal are bullish with target prices of ₹1,810 and ₹2,000, respectively, while Emkay, Nuvama, and Morgan Stanley are cautious, citing valuation and demand concerns.

4. Is Tech Mahindra a good investment right now?
It depends on your investment horizon. Long-term investors may find value in its deal pipeline and transformation efforts, while short-term investors should monitor macroeconomic trends and technical support levels.

5. What is Tech Mahindra’s dividend policy?
For FY25, the company declared a total dividend of ₹45 per share, including a final dividend of ₹30 and an interim dividend of ₹15.

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Disclaimer

This article is for informational and educational purposes only and does not constitute financial advice. The stock market is inherently volatile, and investments in Tech Mahindra or any other stock carry risks. Past performance is not indicative of future results. Investors are advised to conduct their own research and consult with certified financial advisors before making investment decisions. Market conditions can change rapidly, and individual circumstances vary. The author and publisher are not responsible for any financial losses incurred from decisions based on this content.

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