Tech Mahindra Q3 Profit Poised for 27% Jump, Margins Set to Improve
Overview
Tech Mahindra is anticipated to report strong December quarter earnings on January 16, 2026. Analysts project a 27% year-on-year profit increase to ₹1,425 crore and a 7% revenue rise to ₹14,196 crore. Margin improvements are also expected due to cost optimization efforts, with brokerages highlighting growth in technology, media, telecom, and retail segments.
Stocks Mentioned
Tech Mahindra Gears Up for Strong December Quarter Results
Information technology major Tech Mahindra Ltd. is poised to announce its December quarter earnings on Friday, January 16, 2026. Analysts are forecasting a significant boost in profitability, with the company expected to report an average net profit of ₹1,425 crore. This represents a robust 27% year-on-year increase from the ₹1,121.7 crore posted in the same period last year.
Revenue is also on an upward trajectory. Projections suggest a 7% year-on-year growth, reaching ₹14,196 crore, up from ₹13,286 crore in the prior year. Sequentially, revenue is anticipated to climb 1.4% from the ₹13,995 crore recorded in Q2FY26, driven by expansions in the technology, media, and telecom (TMT) and retail sectors.
Brokerage Forecasts Point to Margin Expansion
Brokerage firms widely anticipate an improvement in operating margins. Nomura expects the Earnings Before Interest and Taxes (EBIT) margin to increase by 60 basis points quarter-on-quarter to 12.7%, attributing this to ongoing cost optimization strategies. Kotak Institutional Equities forecasts further margin enhancement, projecting the company to end FY2026E with a 13% EBIT margin. Motilal Oswal Financial Services also predicts a 60 bps margin improvement to 12.7%, supported by better gross margins and optimized fixed costs.
Axis Direct anticipates a 35 bps margin improvement to 12.5% on the back of cost-saving initiatives. Investors will be closely watching management's commentary on key sectors like banking, financial services, and insurance (BFSI) and TMT, alongside updates on multi-year deal wins and the sustainability of these margin improvements.
Deal Wins and Sectoral Outlook
Net new deal wins are a crucial focus. Nomura pegs these between $600-$800 million, while Kotak Institutional Equities expects wins ranging from $875-900 million, signaling a healthy pipeline with potentially higher margins. Analysts are keen to understand the outlook for the BFSI segment and the recovery expected in communications and manufacturing sectors in the latter half of the fiscal year, particularly as challenges in Europe ease.
