Tech Mahindra Q2 FY27 Results Analysis: PAT Jumps 32.7%, EBIT Margin Expands 260 bps (TECHM)
Tech Mahindra Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 16,180.20 Cr (+15.60% YoY) and PAT growth of +32.70% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 15, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 16,180.20 Cr (+15.60% YoY) |
| PAT (Q2) | Rs. 1,585.60 Cr (+32.70% YoY) |
| EBITDA margin | 17.79% (+232 bps YoY) |
| EPS (Q2) | Rs. 17.88 (+32.60% YoY) |
| Market cap | Rs. 161,644.16 Cr |
| CMP | Rs. 1,650.00 |
Quarter Snapshot
Tech Mahindra delivered 15.6% YoY revenue growth (fastest in five quarters) with EBIT margin at 14.8%, up 260 bps YoY and the twelfth consecutive quarter of expansion, tracking 20 bps below the guided 15% FY27 target. PAT (owners) grew 32.7% YoY on operating leverage, deal wins stayed above $1 Bn for a fourth straight quarter, and the large European telecom deal ramp is visible in Communications (+6.0% QoQ). Watch items are the Manufacturing QoQ decline from European auto delivery timing, DSO rising to 88 days with FCF/PAT at 81%, and the H-1B rule impact expected from Q3 FY27.
Key Investment Insights
Key Positives
- Revenue grew 15.6% YoY to Rs.16,180 Cr (+3.0% QoQ), the fastest annual growth in the five-quarter sequence; constant-currency growth was 7.2% YoY
- EBIT margin expanded 260 bps YoY to 14.8% — the twelfth consecutive quarter of expansion, 20 bps below the guided 15% FY27 target
- PAT (owners) grew 32.7% YoY to Rs.1,585.6 Cr, more than double the revenue growth rate
- Deal wins of $1,023 Mn marked the fourth consecutive quarter above $1 Bn; LTM deal wins of $4,270 Mn grew 34.8% YoY
- Europe grew 16.2% YoY (fastest geography); Communications vertical grew 9.5% YoY and 6.0% QoQ as the large European telecom deal ramps up
- IT segment margin at 22.12% (+232 bps YoY) and BPS margin at 17.60% (+109 bps YoY); IT segment result grew 29.3% YoY
- Utilization at 88.9% (from 87.0% QoQ) and attrition at 11.7%, the lowest in the series
- IT headcount rose 1,928 QoQ (+2.6%), the first sequential increase in at least four quarters
- Board declared an interim dividend of Rs.15 per share and recommended a 1:1 bonus issue
Risk Factors
- Manufacturing vertical declined 3.9% QoQ on accelerated European auto delivery timing, the guided 1–1.3% Q2 pressure
- DSO increased to 88 days from 84 in Q1; FCF fell to $135 Mn (81% of PAT) from $167 Mn (108% of PAT) in Q1
- Onsite mix rose to 23.6% from 21.7% YoY, with subcontracting expense up 28.0% YoY — a structural cost headwind
- Others vertical declined 14.1% YoY and 15.0% QoQ
- H-1B visa rule tightening impact expected from Q3 FY27 onwards, not yet addressed in the filing
- Subsidiary contribution to consolidated PAT was negative (−Rs.28.2 Cr vs standalone PAT)
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.