Tech Mahindra Q2 FY27: Profit up 33%, 1:1 bonus

Overview: Tech Mahindra posts double-digit growth in Q2 FY27

Tech Mahindra reported a strong set of operating numbers for the quarter ended September 30, 2026 (Q2 FY27), with consolidated net profit and revenue rising at a double-digit pace year-on-year. The company said growth was supported by its manufacturing and communications verticals. Revenue growth also came with a sequential improvement in margins, keeping the company close to its stated 15% EBIT margin target by the end of FY27.

At the same time, the quarter had a mixed takeaway for the Street. While revenue exceeded analyst expectations, profit came in below the market estimate cited in reports. Alongside the results, the board approved a 1:1 bonus share issue and declared an interim dividend of ₹15 per share.

Q2 FY27 headline numbers

For Q2 FY27, Tech Mahindra reported consolidated net profit of ₹1,586 crore, up 32.7% year-on-year. On a quarter-on-quarter basis, profit rose 8.2% from ₹1,465 crore in Q1 FY27.

Revenue from operations rose 15.6% year-on-year to ₹16,180 crore in Q2 FY27, compared with ₹13,995 crore in Q2 FY26. Sequentially, revenue increased about 3% from ₹15,712 crore in Q1 FY27.

The company also disclosed basic EPS of ₹17.84 for the quarter.

Revenue details: rupee growth and constant currency view

In constant currency terms, Tech Mahindra reported revenue growth of 2.4% quarter-on-quarter and 7.2% year-on-year, with revenue of $1,693 million in Q2 FY27. In dollar terms, revenue rose 2% sequentially from $1,660 million in Q1 FY27 to $1,693 million in Q2 FY27.

The company’s quarterly investor communication also highlighted continued traction in large deals. It noted that Q2 FY27 marked the fourth consecutive quarter of new deal wins exceeding $1 billion in value, with growth of 25.4% year-on-year.

Operating performance: EBIT rises, margin expands to 14.8%

At the operating level, EBIT came in at ₹2,387 crore in Q2 FY27, up 5.4% quarter-on-quarter from ₹2,264 crore in Q1 FY27. On a year-on-year basis, EBIT rose 40.5%, as cited in coverage of the results.

EBIT margin expanded to 14.8% in Q2 FY27, up 40 basis points from 14.4% in the previous quarter. Reports also noted an expansion of about 260 basis points year-on-year.

PAT margin improved by 130 basis points year-on-year to 9.8%, according to the same set of reported figures.

Deal wins: TCV stays above $1 billion

Tech Mahindra reported new deal wins (total contract value) of $1,023 million in Q2 FY27. This was an increase of 25.4% from a year ago, as per a regulatory filing cited in reports.

The company’s commentary around four consecutive quarters above the $1 billion mark underlines steadier large-deal momentum, a metric investors typically track for visibility on near-term revenue conversion.

Workforce and utilisation indicators

Tech Mahindra’s total headcount stood at 152,206 at the end of the July-September quarter. The company added 5,446 employees during the quarter, according to the reported figures.

Attrition remains an important operating indicator for IT services firms because it can influence delivery stability and cost. Tech Mahindra reported last twelve months (LTM) IT attrition at 11.7%.

Cash position and free cash flow

For the quarter, the company reported free cash flow of $135 million. It also reported cash and cash equivalents of ₹7,330 crore at the end of Q2 FY27.

These disclosures matter because cash generation and balance sheet strength can influence capital allocation decisions, including dividends, buybacks, and investment in delivery capacity.

Dividend and 1:1 bonus issue: key shareholder actions

Along with the earnings, Tech Mahindra’s board declared an interim dividend of ₹15 per equity share (face value ₹5 each), equivalent to 300%, for FY 2026-27. This was described as the company’s first dividend payout for FY27.

The company also announced a 1:1 bonus share issue, subject to shareholder and other applicable approvals. Reports described this as Tech Mahindra’s first bonus issue since 2015. Another report said the board approved a bonus issue of 9.8 crore equity shares of ₹5 each, amounting to ₹490.10 crore.

Snapshot table: Q2 FY27 vs Q1 FY27 vs Q2 FY26

Market impact: beats on revenue, profit below expectation

Reports said Tech Mahindra’s revenue beat analyst estimates, supported by year-on-year growth and sequential improvement. However, profit fell short of the market expectation of ₹1,708 crore cited in coverage, even though it rose 32.7% year-on-year.

From an operational lens, the margin expansion to 14.8% and the sequential rise in EBIT were key positives, particularly because the company has communicated a 15% EBIT margin target by the end of FY27. The 1:1 bonus issue and interim dividend added to near-term shareholder focus, but the core discussion for investors remains the durability of growth and margin trajectory.

Analysis: what the numbers signal for Tech Mahindra

The Q2 FY27 result showed a combination of growth and improved efficiency. Revenue rose 15.6% year-on-year to ₹16,180 crore, while EBIT grew faster year-on-year, helping margins move up. Deal wins above $1 billion for a fourth straight quarter and TCV of $1,023 million provide measurable evidence of demand continuity.

The operating detail also points to steady execution. Tech Mahindra reported free cash flow of $135 million and ended the quarter with ₹7,330 crore in cash and cash equivalents. Headcount increased to 152,206 with 5,446 additions during the quarter, while LTM IT attrition stood at 11.7%, offering a view on talent stability.

Conclusion

Tech Mahindra’s Q2 FY27 results combined higher profit and revenue with a sequential margin improvement, while profit missed the market expectation cited in reports. The interim dividend of ₹15 per share and the 1:1 bonus issue were the major shareholder announcements alongside the earnings.

The bonus issue remains subject to shareholder and other applicable approvals, and investors are likely to track follow-through on margins, deal conversion, and subsequent quarterly updates after the September 30, 2026 reporting period.