Tech Mahindra Q2 FY27 Results: Profit Up 33%, 1:1 Bonus & Rs 15 Dividend Declared
Tech Mahindra, India's sixth-largest IT services company, on Thursday (15 October 2026) reported a 32.7% year-on-year jump in consolidated net profit to Rs 1,586 crore for the September quarter of FY27, beating analyst expectations on both revenue and margins. The board sweetened the announcement with a 1:1 bonus share issue — the company's first in 11 years — and an interim dividend of Rs 15 per share, timed with Tech Mahindra's 40th anniversary. The stock surged about 7% on Friday, leading the IT index higher.
Key Numbers: Q2 FY27 vs Q2 FY26
| Metric | Q2 FY27 | Q2 FY26 | Change (YoY) |
|---|---|---|---|
| Revenue (Rs crore) | 16,180.2 | 13,994.9 | +15.6% |
| Net profit (Rs crore) | 1,585.6 | 1,194.5 | +32.7% |
| EBIT (Rs crore) | 2,387 | — | +40.5% |
| EBIT margin | 14.8% | ~12.2% | +260 bps |
| USD revenue | $1,693 mn | — | +6.8% reported / +7.2% CC |
| New deal wins (TCV) | $1,023 mn | ~$816 mn | +25.4% |
| Diluted EPS | Rs 17.84 | — | — |
Sequentially, profit grew about 8% and revenue about 3% over the June quarter. In constant currency, revenue expanded 7.2% year-on-year and 2.4% quarter-on-quarter — a healthy print in a quarter where peers are battling AI-led pricing pressure and weak discretionary demand.
1:1 Bonus Issue — First in 11 Years
Shareholders get one bonus share for every share held. The company last issued bonus shares in the ratio of 1:1 in March 2015. According to the regulatory filing, the bonus shares are expected to be credited by 15 December 2026.
The board also declared an interim dividend of Rs 15 per equity share.
What it means for investors: a bonus issue doesn't change a company's fundamental value — it increases the number of shares outstanding while proportionally lowering the share price. But it improves liquidity, signals management confidence, and often gives the stock a sentiment boost. The Rs 15 interim dividend, meanwhile, is direct cash in the shareholder's pocket.
Margin Turnaround: 12th Straight Quarter of Expansion
The standout of the quarter is the EBIT margin hitting 14.8%, up roughly 260 basis points from a year ago and about 40 bps sequentially. CFO Rohit Anand said on the earnings call that this was the twelfth consecutive quarter of margin expansion, driven by strong volume growth and savings under the company's "Project Fortius" efficiency programme, partially offset by wage hikes.
Management has guided for an FY27 margin target of around 15% — Tech Mahindra is now a whisker away from that goal, a remarkable turnaround for a company that was battling margin erosion under its previous leadership. CEO Mohit Joshi called it "an extremely strong quarter with broad-based growth across businesses."
Deal Wins Cross $1 Billion for the Fourth Straight Quarter
New deal-win total contract value (TCV) came in at $1,023 million, up 25.4% year-on-year — the fourth consecutive quarter above the $1 billion mark. Joshi said deal wins exceeding $1 billion in each of the last four quarters "reflect the strength of our customer relationships and the trust we have built."
Other operational highlights:
- Total headcount rose to 152,206, with last-twelve-months IT attrition at 11.7%
- Cash and cash equivalents stood at Rs 7,330 crore at quarter-end
- Free cash flow of $135 million; days of sales outstanding at 88 days
- Communications and Europe verticals drove growth; manufacturing declined sequentially
Stock Reaction: Tech Mahindra Leads IT Rally on 16 October
Tech Mahindra shares jumped about 7% on Friday, 16 October 2026, emerging as the top gainer in the Nifty IT index alongside Infosys, TCS and HCLTech. The rally came on top of Thursday's surge, when the benchmarks posted their biggest single-day gains in four months on a rebound in the global AI trade and better-than-expected IT earnings.
The outperformance narrative: as V K Vijayakumar of Geojit Investments noted, good results from the IT majors and positive management commentary have driven a smart ~9% revival in the IT index, making it a key pillar of the Nifty's resilience even as FIIs sold Rs 5,285 crore of Indian equities on Thursday.
Brokerages remain constructive — Motilal Oswal has a 'Buy' rating on the stock with a target price of Rs 1,860, implying roughly 22% upside from current levels. Watch for FY27 revenue guidance commentary and margin trajectory beyond FY27 as the next triggers.
What's Next to Watch
| Trigger | Detail |
|---|---|
| Bonus credit date | By 15 December 2026 |
| FY27 margin goal | ~15% — within touching distance at 14.8% |
| Q3 FY27 seasonality | Seasonally soft quarter; deal conversion key |
| IT peers | Infosys Q2 FY27 results due 23 October 2026 |
| Sector trend | Deal ramp-ups in telecom; AI deal visibility |
FAQs
What is a 1:1 bonus issue?
For every share you hold, you receive one extra share free. Your total investment value stays the same (the share price adjusts down), but your share count doubles and liquidity improves.
When will Tech Mahindra's bonus shares be credited?
According to the company's regulatory filing, the 1:1 bonus shares are expected to be credited by 15 December 2026. The record date will be announced separately.
What dividend did Tech Mahindra declare with Q2 FY27 results?
An interim dividend of Rs 15 per equity share for FY27.
How did Tech Mahindra's Q2 FY27 profit compare to estimates?
Net profit of Rs 1,585.6 crore (up 32.7% YoY) and EBIT margin of 14.8% both came in ahead of street expectations, which had pencilled in ~1.2-1.6% constant-currency revenue growth and flattish margins.
Why are Tech Mahindra shares rising?
The sharp rally on 16 October followed the strong Q2 print — 33% profit growth, 12th straight quarter of margin expansion, $1B+ deal wins, plus the 1:1 bonus and Rs 15 dividend announced on the company's 40th anniversary.
Bottom Line
Tech Mahindra's Q2 FY27 was the latest proof that the Project Fortius turnaround is working: 33% profit growth, margins knocking on the 15% target, four straight quarters of $1-billion-plus deal wins, and a 1:1 bonus with a Rs 15 dividend to mark 40 years. With Nifty IT reviving on better-than-expected IT earnings, the sector's momentum is firmly back in play. As with all equity investments, this is information, not investment advice — do your own research or consult a SEBI-registered advisor. For context on another turnaround-era IT giant, read the Zero to IPO: The Infosys Story and the TCS financial breakdown.