Margin expansion likely to drive earnings upgrades for Tech Mahindra

Antique Stock Broking has maintained a hold rating, given that a sustained improvement in large-deal wins is key to delivering FY27 growth acceleration

Tech Mahindra could get an earnings upgrade on margin gains after India’s fifth-largest information technology (IT) services company beat expectations in the second quarter of 2025-26 (Q2FY26).

 

The company’s operating profit margin expanded by 110 basis points to 12.1 per cent in Q2, the eighth consecutive quarter of such expansion. It was led by higher productivity in fixed price projects, volume growth, savings from sales, general and administration optimisation, and currency benefits. 

 

Tech Mahindra expects to hit the 15 per cent margin, led by better integration of group companies, lower subcontracting costs, a higher mix of fixed-price projects, and improving