Tech Mahindra's Q3 profit may rise 27% YoY; margins to improve: Analysts

Tech Mahindra Q3 results preview: The company's revenue for the quarter under review is expected to rise 7 per cent in Q3FY26, on average, to ₹14,196 crore as compared to ₹13,286 crore a year ago.

Tech Mahindra Q3 results preview: Information technology (IT) major Tech Mahindra Ltd. is set to report its December quarter earnings on Friday, January 16, 2026. Brokerages tracked by Business Standard estimate Tech Mahindra to report a net profit on average at ₹1,425 crore as compared to ₹1,121.7 crore year-on-year (Y-o-Y), up 27 per cent. On a quarter-on-quarter (Q-o-Q) basis, the profit is anticipated to grow 19 per cent from ₹1,198.5 crore in Q2FY26.

 

The company's revenue for the quarter under review is expected to rise 7 per cent in Q3FY26, on average, to ₹14,196 crore as compared to ₹13,286 crore a year ago. Sequentially, the revenue is poised to climb 1.4 per cent from ₹13,995 crore in Q2FY26 on the back of growth in technology, media, and telecom (TMT) and retail segments.

 

 

Analysts and investors will keep an eye on management's commentary on banking, financial services, and insurance (BFSI) and TMT, multi-year deal wins, and cost optimisation strategy.  ALSO READ | Wipro Q3 preview: Revenue may rise 3% QoQ on Phoenix ramp-up, Harman deal

How will Tech Mahindra fare in Q3FY26? Brokerages decode:

Nomura: The brokerage expects revenues to grow by 0.5 per cent Q-o-Q in constant curreny (CC) terms led by both communications and enterprise verticals. Net new deal wins are pegged between $600-$800 million.

 

Ebit margin to increase 60 basis points (bps) Q-o-Q to 12.7 per cent, as compared to 12.1 per cent in Q2FY26, driven by ongoing cost optimisation exercise.

 

Kotak Institutional Equities: Analysts forecast CC revenue growth of 0.5 per cent led by retail and Comviva businesses. The brokerage expects overall Ebit to come in at ₹1,805.5 crore, as compared to ₹1,699.3 crore in Q2 and ₹1,350.2 crore in Q3FY25. Further margin improvement is anticipated, and expect the company to exit FY2026E with 13 per cent Ebit margin. 

 

Net new deal wins of $875-900 million, up 10 per cent Q-o-Q and 20 per cent Y-o-Y, are expected. New deals are likely to have a higher margin.   ALSO READ | Tata Elxsi Q3 margins expand, growth uneven; brokerages maintain 'Sell' 

Motilal Oswal Financial Services: The brokerage expects revenue to grow 0.5 per cent Q-o-Q CC as furloughs impact growth partially. Auto may show recovery in selected pockets in manufacturing. Communication may recover in H2 as temporary challenges in Europe ease. 

 

Europe is anticipated to pick up traction again on the back of vendor consolidation opportunities, while some cautiousness is expected in commercial vehicles in manufacturing. 

 

 The company's Ebit margin is expected to improve by 60 bps Q-o-Q to 12.7 per cent,  supported by improved gross margins as the company optimises fixed cost projects. Ebit is expected to come in at ₹1,800 crore, as compared to ₹1,700 crore on Q2. Analysts built in a 13 per cent exit margin by FY26.

 

Axis Direct: The brokerage expects 2 per cent Q-o-Q growth in revenue backed by the TMT and Retail segments. Ebit margin likely to improve by 35 bps Q-o-Q to 12.5 per cent from 12.1 per cent in Q2FY26, led by cost optimisation initiatives. 

 

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