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News Topical, Digital Desk : The market is brimming with anticipation ahead of IT giant Tech Mahindra's September quarter (Q2FY26) results. the company's profit (PAT) is expected to rise 15% to ₹1,317 crore, while revenue is expected to rise 3.4% to ₹13,805 crore. EBIT margins are also expected to improve, rising from 11.1% to 11.7%, driven by the company's Project Fortius and cost control measures.
What improvement can be seen in EBIT and margin - According to the poll, EBIT may be ₹1,622 crore (QoQ +10%), while EBIT margin may increase by 60 basis points to 11.7%.
| quarterly | EBIT % |
|---|---|
| Q2FY24 | 4.7% |
| Q3FY24 | 5.4% |
| Q4FY24 | 7.4% |
| Q1FY25 | 8.5% |
| Q2FY25 | 9.6% |
| Q3FY25 | 10.2% |
| Q4FY25 | 10.5% |
| Q1FY26 | 11.1% |
This represents an improvement of over 6% over the past year, and is now expected to reach 11.7% in Q2FY26.
The company's order book (Deal Wins) is on track. The company won new deals worth $809 million in Q1FY26, a 44% year-on-year increase. New deals worth $700–800 million are also expected this quarter. Total deal bookings over the past 12 months were $2.95 billion, representing a 44% year-on-year increase.
Sectors that are performing well for the company: BFSI (Banking & Financial Services) and Communications are the company's strongest verticals.
-BFSI saw a 4.7% year-on-year growth.
-Communications, Media & Entertainment saw a 2.5% growth.
-Manufacturing and Technology sectors are showing weakness. -Manufacturing -4% (due to the auto sector slowdown). -Technology -3.3% (due to reduction in discretionary spending and slowdown in the semiconductor industry). -Management believes that these sectors will start recovering in the second half (H2FY26). -How was the geography-wise performance? America: +2.6% Europe: +3.6% Rest of the world (ROW): -4.5% i.e. Europe and America still remain the growth drivers.
What is the company's future target Tech Mahindra has set a big target for the next three years - to increase EBIT margin to 15% by FY27, and to achieve faster revenue growth than peer companies (Infosys, TCS, HCLTech). The company's Project Fortius is working in this direction, which is restructuring and cost optimizing portfolio companies.
What are the signs for investors? Overall, margin improvement and stable profit growth are expected in Q2FY26. However, revenue growth may still remain limited (flat to low single digit). Weakness in the Auto and Tech sectors may bring short-term pressure, but the BFSI and Communication verticals are providing a balancing effect. Tech Mahindra is gradually in its turnaround phase. Improving margins and a strong deal pipeline indicate that FY26 and FY27 may prove to be a recovery phase for the company. For investors, the key points to watch for now will be deal flow, BFSI growth and recovery of the auto sector.
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