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Tech Mahindra's Q2 Results Spark Divergent Analyst Views
15 Oct
Summary
- Tech Mahindra Q2 net profit down 4.5% year-over-year
- Brokerages maintain 'Buy' and 'Reduce' ratings with differing target prices
- Margin expansion seen as a challenge amid macro uncertainties
On October 15th, 2025, Tech Mahindra, the Indian IT services major, reported a 4.5% drop in its Q2 FY2026 net profit. This has led to a 1% decline in the company's share price in early trading.
Following the results, the brokerages have taken divergent stances on the company's outlook. Motilal Oswal has maintained its 'Buy' rating on Tech Mahindra, setting a target price of Rs 1,900, which implies an upside potential of 29% from current levels. The brokerage noted that the company's performance in Q2 was slightly better than expected, with revenue growth and margin improvement.
In contrast, Nuvama has retained its 'Reduce' rating on Tech Mahindra, setting a target price of Rs 1,350, which suggests a 7% downside. The brokerage acknowledged Tech Mahindra's decent Q2 results but expressed caution about the company's growth trajectory in the challenging macro environment, stating that margin expansion could be more difficult going forward.
Nomura, on the other hand, has taken a bullish stance, maintaining a 'Buy' rating on Tech Mahindra with a target price of Rs 1,670, implying a 13.8% upside. The international brokerage firm believes the company's Project Fortius continues to drive positive results, helping boost margins through operational improvements.
Overall, the divergent views among analysts reflect the uncertainty surrounding Tech Mahindra's ability to navigate the current macroeconomic landscape and sustain its turnaround efforts in the coming quarters.
