Keshav Seth 19 October 2026

Tech Mahindra Share Price Target at Rs 2,050: ICICI Securities

ICICI Securities has reiterated its BUY rating on Tech Mahindra with a 12-month target price of Rs 2,050, about 16% above the Rs 1,765 market price. The IT services company grew September-quarter revenue 2.4% sequentially in constant currency to Rs 16,180 crore, led by a large Orange telecom deal and a 9.9% jump in retail and logistics. EBIT margin widened for a 12th straight quarter to 14.8%, close to the 15% fiscal 2027 goal, and profit rose 32.7% from a year earlier to Rs 1,586 crore. Deal wins topped Rs 9,500 crore for a fourth quarter running. The brokerage values the stock at 22 times fiscal 2028 earnings.

BUY MAINTAINED
Q2FY27 Result Update
IT Services

Tech Mahindra Compiles a Clean Quarter as Margin Run Nears Its 15% Goal

ICICI Securities keeps its BUY call and Rs 2,050 target, citing broad-based growth, a widening margin and a deal engine that has now delivered four strong quarters in a row.

techm_levels.cfg

01  house     = "ICICI Securities"
02  rating    = "BUY" # maintained
03  cmp       = Rs 1,765
04  target    = Rs 2,050 # 12 months
05  upside    = ~16%
06  basis     = "22x FY28E EPS Rs 92.7"
07  range_52w = Rs 1,304 – 1,854
08  m_cap     = Rs 1,56,566 crore

Release notes for the September quarter

ICICI Securities, in an Oct. 16 result update, called it a "strong performance" with a healthy outlook. Read as a changelog, the quarter shipped far more additions than fixes.

ADDED
Deal wins of about Rs 9,780 crore, up 25.4% from a year earlier, and seven more clients in the top revenue bracket.

IMPROVED
EBIT margin up about 40 basis points sequentially and 260 basis points annually to 14.8%; IT utilisation up to 88.9%.

SHIPPED
An interim dividend of Rs 15 a share and a proposed 1:1 bonus issue to mark the company's 40th anniversary.

KNOWN ISSUE
Manufacturing revenue fell 3.8% sequentially, with a smaller drag of about 0.5% expected in the December quarter.

Growth arrives from more than one direction

Revenue rose 2.0% sequentially and 6.8% annually in dollar terms, or 2.4% and 7.2% in constant currency. In rupee terms revenue reached Rs 16,180 crore, up 15.6% year on year.

Communications, a third of revenue, grew 5.8% as the Orange contract ramped up. Revenue from large accounts, those above about Rs 191 crore a year, rose 3.1% sequentially and 11.7% annually, a sign of rising wallet share.

Revenue mix by geography · share of total

Americas 48.5%

Europe 27.6%

Rest 23.8%

Dollar growth, quarter on quarter / year on year: Americas 1.8% / 4.1%; Europe 2.5% / 16.2%; rest of world 1.6% / 2.5%.

Vertical	Share of revenue	QoQ growth	YoY growth
Communications	33.5%	5.8%	9.4%
Manufacturing	18.2%	-3.8%	7.1%
Banking, financial services and insurance	16.4%	0.1%	4.3%
Hi-tech and media	13.0%	2.8%	6.3%
Retail, transport and logistics	8.7%	9.9%	9.5%
Healthcare and life sciences	7.3%	2.2%	6.9%
Others	2.8%	-16.0%	-13.9%

Twelve quarters of wider margins

The 14.8% EBIT margin marks the 12th consecutive quarter of improvement. Volume growth and savings from Project Fortius, the company's cost and efficiency programme, more than offset wage increases. Management reiterated its 15% fiscal 2027 target and sees further room from AI-led productivity, automation and a leaner employee pyramid. ICICI Securities builds in 14.9% for fiscal 2027 and 15.3% for fiscal 2028.

Rs crore	Q2FY27	Q2FY26	YoY	Q1FY27	QoQ
Revenue	16,180	13,995	15.6%	15,712	3.0%
EBITDA	2,879	2,168	32.8%	2,743	5.0%
EBIT	2,387	1,699	40.5%	2,264	5.4%
EBIT margin	14.8%	12.0%	+261 bps	14.4%	+34 bps
Net profit	1,586	1,194	32.7%	1,465	8.2%

A deal engine on a four-quarter streak

New deal wins came to about Rs 9,780 crore, down 5.1% from the June quarter but up 25.4% from a year earlier. Wins over the trailing 12 months climbed 34.8% to roughly Rs 40,800 crore. The number of clients billing more than about Rs 478 crore a year rose to 33 from 26.

Contribution graph · quarters with wins above about Rs 9,560 crore

Q3FY26 ✓

Q4FY26 ✓

Q1FY27 ✓

Q2FY27 ✓ ~Rs 9,780 cr

Only the latest quarter's value is printed in the report.

AI moves past the pilot stage

Management said AI work is moving from pilots to scaled implementations, backed by Project Helix and 200-plus AI assets. New launches included a Zero Gravity telco architecture and Indus Terra, a 3,000 crore-parameter educational language model built with NVIDIA and AWS, plus an AI engineering tie-up with SpaceXAI. Separate reporting of AI revenue is expected to begin in the second half of fiscal 2027.

Headcount rose to 1,52,206, utilisation improved to 88.9% from 87.0%, and trailing IT attrition eased to 11.7%.

IT 76,617

BPS 67,520

Workforce by function; the narrow segment is sales and support at 8,069.

Estimates pushed higher

After the quarter ICICI Securities now expects dollar revenue to compound at 6.8% a year over fiscal 2026-28, up from 6.3%. The revisions appear below as a code diff.

@@ estimates.fy27e @@
- revenue Rs 63,461 cr  ebit Rs 9,317 cr  margin 14.7%  eps Rs 76.2
+ revenue Rs 64,786 cr  ebit Rs 9,668 cr  margin 14.9%  eps Rs 77.7  (+2.0%)
@@ estimates.fy28e @@
- revenue Rs 67,045 cr  ebit Rs 10,124 cr  margin 15.1%  eps Rs 88.8
+ revenue Rs 69,140 cr  ebit Rs 10,578 cr  margin 15.3%  eps Rs 92.7  (+4.3%)

Rs crore	FY25	FY26	FY27E	FY28E
Net sales	52,988	56,815	64,786	69,140
EBIT margin	9.7%	12.6%	14.9%	15.3%
Adjusted net profit	4,252	5,083	6,877	8,194
EPS (Rs)	48.0	57.3	77.7	92.7
P/E (x)	36.8	32.5	22.7	19.0
RoCE	18.6%	20.6%	25.9%	26.6%

Levels and the target for investors

Citing sustained outperformance against larger peers on both revenue and margins, ICICI Securities maintains BUY with a target of Rs 2,050, set at 22 times fiscal 2028 EPS of Rs 92.7. That product is about Rs 2,039, rounded up by the house. The stock trades at 19 times fiscal 2028 earnings, holds net cash above Rs 8,300 crore and returns at least 85% of free cash flow to shareholders.

Rating	CMP	Target	Upside	Horizon	52-week range
BUY	Rs 1,765	Rs 2,050	~16%	12 months	Rs 1,304–1,854

Investors should keep the proposed 1:1 bonus in mind. If approved, TopNews arithmetic puts the equivalent levels at roughly Rs 883 for the current price and Rs 1,025 for the target.

Key risks

Revenue growth and margin expansion could fall short of expectations.
Margin gains could slow from here because of the high base already reached.
Added by TopNews: the manufacturing slowdown and wage increases, both of which management describes as near-term watchpoints.

The first two are the brokerage's printed risks.

Editor's note

The report's first page says manufacturing revenue fell 3.9% sequentially, while its vertical table and later commentary show 3.8%. TopNews uses the table figure.
The ratio table leaves fiscal 2028 dividend per share blank, yet the cash flow statement assumes dividend payouts of Rs 3,732 crore that year, the same as fiscal 2027.
Fiscal 2026 profit appears as Rs 5,083 crore (EPS Rs 57.3) in the summary and Rs 4,811 crore (EPS Rs 54.3) in the income statement. The gap equals a Rs 272 crore exceptional charge, so this is adjusted versus reported profit rather than an error.

Sources and disclaimer

ICICI Securities (ICICI Direct Research) result update on Tech Mahindra dated Oct. 16, 2026, by research analysts Bhupendra Tiwary and Anjini Sharma; company disclosures. Dollar figures converted at about Rs 95.6, the rate implied by the report's own rupee and dollar revenue. Post-bonus levels are a TopNews calculation.

This TopNews Stock report is based on a third-party brokerage report and is for information only. It is not investment advice. Investments in the securities market are subject to market risks; read all related documents carefully and consult a registered adviser before investing.

Levels at a glance: Tech Mahindra · CMP Rs 1,765 · Target Rs 2,050 · Upside ~16% · Rating BUY (ICICI Securities) · 52-week range Rs 1,304–1,854

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