Tech Mahindra Q2 FY27 results: net profit up 34.0% to ₹1,610 crore, revenue up 15.6%

How did Tech Mahindra perform in Q2 FY27?

Tech Mahindra reported consolidated revenue of ₹16,180 crore for Q2 FY27, up 15.6% from ₹13,995 crore in Q2 FY26 and 3.0% from ₹15,712 crore in Q1 FY27. Total income rose 15.2% to ₹16,172.8 crore from a year earlier. EBITDA rose 32.8% to ₹2,878 crore, lifting the EBITDA margin 2.3 percentage points to 17.8% from 15.5% a year ago and 0.3 percentage points from 17.5% in the previous quarter.

Profit before tax rose 38.4% to ₹2,296 crore from ₹1,659 crore a year earlier and 12.2% from ₹2,046 crore in Q1 FY27. Net profit was ₹1,610 crore, up ₹408 crore or 34.0% from Q2 FY26 and ₹123.40 crore or 8.3% from the previous quarter, while profit attributable to owners rose 32.7% to ₹1,586 crore. Basic EPS was ₹17.88, up ₹4.40 from ₹13.48 a year earlier and ₹1.35 from ₹16.53.

On a standalone basis, revenue for the quarter was ₹13,742.4 crore, up 13.9%, and profit after tax was ₹1,613.8 crore against ₹1,175.7 crore a year earlier. The board approved the audited consolidated and standalone financial results for the quarter and half year ended 30 September 2026.

What changed in Tech Mahindra's costs and profit?

Total expenses rose 12.2% to ₹13,877 crore in Q2 FY27 from ₹12,373 crore a year earlier, slower than revenue growth of 15.6%. Employee cost rose 7.9% to ₹8,232 crore, up ₹603 crore, while other expenses rose 20.8% to ₹5,070 crore, up ₹871.80 crore. Finance costs rose 8.3% to ₹83.60 crore and depreciation rose 4.8% to ₹491.40 crore.

Other income fell ₹47.40 crore from ₹40 crore in Q2 FY26 to ₹7.40 crore in the reported quarter. There was no exceptional item in the quarter, against a charge of ₹2.80 crore in the year-ago quarter. Tax rose 50.0% to ₹686.40 crore from ₹457.60 crore.

Against the previous quarter, employee cost rose 4.5% to ₹8,232 crore, other expenses fell 0.5% to ₹5,070 crore, finance costs fell 24.9% to ₹83.60 crore and depreciation rose 2.7% to ₹491.40 crore. Other income was ₹99 crore higher than in Q1 FY27, and tax rose 23.5% to ₹686.40 crore from ₹555.60 crore.

How did the first half of FY27 go?

In the first half of FY27, Tech Mahindra reported revenue of ₹31,892.1 crore, up ₹4,546 crore or 16.6% from ₹27,346.1 crore in H1 FY26. Total income rose 15.1% to ₹31,778.3 crore from ₹27,604.4 crore, and profit before tax rose 32.4% to ₹4,338 crore from ₹3,277.4 crore.

Net profit for H1 FY27 was ₹3,096 crore, up ₹765.5 crore or 32.8% from ₹2,330.5 crore in H1 FY26. Basic EPS rose 30.6% to ₹34.41 from ₹26.35.

What do the balance sheet and cash flow show?

At 30 September 2026, total assets were ₹48,803 crore, down from ₹49,369.4 crore at 31 March 2026. Total equity rose to ₹30,122.3 crore from ₹30,077 crore, while borrowings were ₹2,183.5 crore against ₹2,186.2 crore. Cash and cash equivalents fell to ₹4,719.8 crore from ₹5,046.1 crore.

Trade receivables stood at ₹14,100.2 crore against ₹13,357.7 crore at 31 March 2026, and trade payables were ₹5,131.5 crore against ₹5,040 crore. Inventories were ₹94.7 crore against ₹104.2 crore. In H1 FY27, operating cash flow was ₹3,469.7 crore against ₹3,169.39 crore a year earlier, investing cash flow was ₹188.6 crore against a negative ₹66.8 crore, and financing cash flow was a negative ₹3,408.2 crore against a negative ₹3,297.14 crore. Capital expenditure was ₹596 crore against ₹341.5 crore.

How has Tech Mahindra done over the last 8 quarters?

Revenue rose year on year in each of the last eight quarters, moving from ₹13,285.6 crore in Q3 FY25 to ₹16,180.2 crore in Q2 FY27, the highest of the period shown. Net profit has risen year on year in each of the last four quarters, from ₹1,128.8 crore in Q1 FY26 to ₹1,609.7 crore in Q2 FY27.

The EBITDA margin moved higher through the period, from 13.6% in Q3 FY25 to a low of 13.7% in Q4 FY25 and then to 17.8% in Q2 FY27, the highest reading in the series. The shape of the trend is upward on all three measures, with revenue and margin at their period highs in the reported quarter and profit also at its high. Q2 FY27 revenue was 15.6% higher than a year earlier and 3.0% higher than Q1 FY27.

Which businesses drove the quarter?

The IT segment reported revenue of ₹13,611.8 crore in Q2 FY27, up 15.7% from ₹11,766.92 crore in Q2 FY26, with EBIT of ₹3,011.4 crore against ₹2,329.33 crore. The EBIT margin for the segment was 22.1%.

The BPS segment reported revenue of ₹2,568.4 crore, up 15.3% from ₹2,227.98 crore a year earlier, with EBIT of ₹452.1 crore against ₹367.89 crore. The EBIT margin for the segment was 17.6%.

What else did the company announce?

The board approved the audited consolidated and standalone financial results for the quarter and half year ended 30 September 2026, together with the unmodified audit reports, the press release and the quarterly earnings presentation.

The board declared an interim dividend of ₹15 per equity share of face value ₹5 each, or 300%, for FY2026-27. The record date for entitlement is 23 October 2026 and the dividend is to be paid by 13 November 2026 through electronic mode. The board also recommended a 1:1 bonus issue of fully paid-up equity shares of ₹5 each for shareholders' approval through postal ballot, and an increase in authorised share capital from ₹924.3 crore to ₹1,000 crore. Bonus shares are estimated to be credited or dispatched by 15 December 2026.

What did the auditors point out?

The statutory auditor, SR & Co. LLP, reported an unmodified opinion on the consolidated financial results. The report includes an emphasis of matter drawing attention to Note 4 of the consolidated financial results, which describes matters relating to erstwhile Satyam Computer Services Limited, amalgamated with the holding company from 1 April 2011, and claims made by 37 companies for alleged advances amounting to Rs. 12,304 million, presented under a suspense account.

The auditors also drew attention to the Directorate of Enforcement's direction that erstwhile Satyam not return the alleged advances until further instructions, and noted that appeals were filed before the Division Bench of the High Court of Andhra Pradesh against the single judge's order sanctioning the scheme of merger. The report states that the Group presented the incremental impact of Rs. 2,724 million related to employee benefit obligations under the New Labour Codes as an exceptional item, considering its materiality and regulatory-driven, non-recurring nature.

What did Tech Mahindra's management say?

On the earnings call on 21 October 2026, management reiterated the FY27 EBIT margin target at 15% and full-year free cash flow conversion of 90-100% of PAT, and said the capital-allocation policy is to return at least 85% of free cash flow. Management expects a broadly 0.5% sequential revenue headwind in Q3 FY27 from the European automotive programme, normal Q3 and Q4 seasonality, and BFSI growth returning to 8% or higher in Q3.

The chief operating officer, Atul Soneja, said, "Our principle is simple. AI revenue must be evidenced by client-funded work and reconcilable to financial records." The chief executive officer and managing director, Mohit Joshi, said, "We don't believe for a moment that the gross margin opportunities in the business have been fully tapped out, and we continue to work diligently to make sure that we can continue to expand margins while we obviously prioritize on growth," and, "The future is very much about growth."

Management's stated risks were that AI automation and lower-cost open models may compress effort-based services revenue and pricing power, that large Communications client concentration can create revenue volatility, that BFSI growth has been slower than management expected, and that intense industry competition is driving price compression and greater client productivity demands. Management sees continued gross margin opportunity from skills mix, AI productivity and fixed-price rationalisation in H2 FY27 and the next three years.

How did Tech Mahindra shares react?

The filing came after market hours on 15 October 2026. From the pre-results close of ₹1,650, the stock moved down 0.3% in the first five minutes, then rose 1.1% after 15 minutes and 2.0% after 30 minutes, closing the first session that could trade on the news 8.5% higher.

By the next day's close the stock was up 7.8% from its pre-results close, and by five sessions later it was up 8.8%. The industry median move was 1.4% on the reaction day and a negative 4.2% over five sessions, so the stock's excess return over the industry median was 7.1 percentage points on the reaction day and 13.0 percentage points over five sessions. The Nifty 100 moved 0.6% on the reaction day and a negative 1.5% over five sessions.

Earlier reaction-day moves were mixed: 3.6% on 16 July 2026, a negative 2.4% on 22 April 2026, 2.3% on 16 January 2026, a negative 0.9% on 14 October 2025 and a negative 2.8% on 16 July 2025.

How did other Computers - Software & Consulting companies do?

Thirty-three Computers - Software & Consulting companies were compared with Tech Mahindra for this quarter, with the peer median revenue growth at 12.9%. Against Tech Mahindra's revenue growth of 15.6%, 13 peers grew faster and 20 grew slower.

Of the 32 peers for which profit was compared, 20 reported higher profit.