Tech Mahindra shares gain 5% after Q2 results. Should you buy, sell or hold the stock?

Tech Mahindra shares gained as much as 5% to their day’s high of Rs 1,736 on the BSE on Friday after reporting a 32.7% year-on-year (YoY) increase in consolidated net profit attributable to owners to Rs 1,585.6 crore in Q2FY27, compared with Rs 1,194.5 crore in the corresponding quarter last year.

Revenue from operations rose 15.6% YoY to Rs 16,180.2 crore in Q2FY27, up from Rs 13,994.9 crore in Q2FY26. EBITDA increased 32.8% to Rs 2,878.5 crore from Rs 2,168 crore in the year-ago quarter.

Read More: Wipro share price: What are Nomura, Goldman Sachs analysts saying?

Tech Mahindra Share Price: Buy, sell or hold Tech Mahindra shares?

Nomura retains a Neutral call and sees no upside for Tech Mahindra stock. Nomura expects Tech Mahindra to deliver above-peer growth in FY27, supported by the ramp-up of two large telecom deals won in the second half of FY26 and growth across other verticals.

Tech Mahindra's target of achieving an average EBIT margin of 15% in FY27 remains unchanged. Management identified AI-led productivity improvements, including converting time-and-material contracts to fixed-price contracts, and continued operational efficiencies under Project Fortius as key drivers of margin expansion over FY26.

With Tech Mahindra's management having largely achieved its three-year goals, Nomura believes investors will now focus on the company's future growth strategy, particularly its ability to broaden growth across verticals.

Nuvama has maintained a Buy rating on Tech Mahindra with a target price of Rs 1,950, citing strong deal wins and the potential for earnings growth. The brokerage said four consecutive quarters of deal wins exceeding $1 billion position Tech Mahindra to outperform all its large-cap peers on growth in FY27. Margins are also expected to approach the company's 15% target.

Nuvama expects Tech Mahindra to deliver an earnings compound annual growth rate (CAGR) of 25% over the next two years. It believes this growth outlook supports valuations comparable to LTIMindtree, rather than those of the top three large-cap IT companies.

Read More: PC Jeweller, Shanti Gold Share Price: Why Jewellry Shares rise 10% today

Choice Institutional Equities maintains an Add rating on the stock and a target price of Rs 1,775 (11% upside). The management retained its 15% FY27 margin target and sees further productivity benefits from AI toolchains, pyramid optimisation and headcount release. “TechM Helix is moving from capability-building to scaled execution, with AI revenue disclosure commencing in H2FY27. Demand commentary remains constructive, with a strong Comms pipeline and BFSI expected to return to 8%+ growth; European auto weakness is viewed as manageable,” it added.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.