Tech Mahindra share: Q4 profit rises 16%, but why are brokerages cautious?

Tech Mahindra share price: IT services major Tech Mahindra will remain in focus after the company reported its March quarter (Q4FY26) results and announced a final dividend for shareholders.

Profit grows, revenue stays strong

The IT major posted a 16 per cent year-on-year rise in consolidated net profit at Rs 1,354 crore for the quarter ended March 2026. This compares with Rs 1,167 crore in the same period last year.

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Revenue from operations rose 13 per cent to Rs 15,076 crore, up from Rs 13,384 crore a year ago. Growth was supported by strong deal wins and steady performance in its core IT services segment.

Income from the IT services business increased over 11 per cent to Rs 12,660.8 crore during the quarter, compared to Rs 11,327.6 crore in the year-ago period.

Earnings per share (EPS) improved to Rs 15.27, up from Rs 13.17 last year.

Deal wins support outlook

The company highlighted strong deal momentum, with total deal wins touching $3,794 million over the last five years. Management indicated that performance in the core business and improved deal pipeline supported earnings growth.

Rs 36 dividend announced

The board approved a final dividend of Rs 36 per share (face value Rs 5), subject to shareholder approval at the upcoming AGM.

The company has fixed July 3, 2026 as the record date. The dividend is expected to be paid on or before August 14, 2026.

Brokerages stay cautious despite growth

Global brokerages remained divided, highlighting both improving fundamentals and valuation concerns.

Jefferies | Underperform | Target: Rs 1,225

• Jefferies maintained an underperform rating and raised the target price to Rs 1,225 from Rs 1,180.
• It said Q4 revenues were largely in line but profit missed estimates due to forex losses.
• The brokerage raised FY earnings estimates by 2–3 per cent, supported by INR depreciation.
• It expects strong deal wins, improving outlook in the communications vertical, and margin recovery to drive 3.6 per cent and 13 per cent CAGR in constant currency revenue and EPS over FY26–29.
• However, it flagged that Tech Mahindra trades at a 16 per cent premium to Infosys, which limits upside.

Morgan Stanley | Underweight | Target: Rs 1,410

Morgan Stanley maintained an underweight rating and cut the target price to Rs 1,410 from Rs 1,600.

Goldman Sachs | Sell | Target: Rs 1,410

Goldman Sachs maintained a sell rating but raised the target to Rs 1,410 from Rs 1,340.

Nomura | Buy | Target: Rs 1,760

Nomura maintained a buy rating and raised the target price to Rs 1,760 from Rs 1,740, indicating confidence in earnings recovery and deal momentum.

Citi | Sell | Target: Rs 1,275

• Citi maintained a sell rating with a target of Rs 1,275.
• It said Q4FY26 performance was largely in line and execution has been reasonable in a tough industry environment.
• However, it added that current valuations already price in most positives.

HSBC | Buy | Target: Rs 1,780

• HSBC maintained a buy rating with a target of Rs 1,780.
• It highlighted a strong quarter and reiterated its FY27 EBIT margin target of 15 per cent.
• The brokerage said telecom remains a key growth driver, with market share gains in Europe.
• It expects strong medium- to long-term earnings growth.

Tech Mahindra share price

Shares of Tech Mahindra closed at Rs 1,463.30, down 2.50 per cent on Wednesday.