Synopsis: Tech Mahindra is expected to report steady Q4FY26 performance, supported by strong deal wins and recovery in its communications segment. Brokerages see improving margins and growth outlook, though challenges remain from weak BFSI demand and uneven deal conversions. Overall, the company shows early signs of a gradual turnaround.
Tech Mahindra has scheduled a Board meeting on April 21 and 22 to review and approve its audited standalone and consolidated financial results for the fourth quarter and the full financial year ended March 31. The Board will also consider recommending a final dividend for FY26. The results will be announced on April 22. Here are the estimates from various brokerage reports an investor should consider before the results come in.
What Are The Expectations?
According to Motilal Oswal, Tech Mahindra’s recent performance indicates early signs of a turnaround, particularly in its communications segment, which has historically been a key drag on growth. The company secured a large USD 500 million deal with a European telecom client, marking a significant positive development for the vertical. The telecom business, which contributes nearly 35 percent of total revenue, reported a growth of around 4.6 percent year-on-year in dollar terms, breaking a prolonged period of decline in Q3FY26. While the BFSI segment remained weak, declining sequentially, the overall performance was relatively balanced across verticals.
The brokerage highlighted that sustaining momentum in communications and ensuring timely execution of recent deal wins will be critical for driving growth ahead. It also noted that the ongoing restructuring under the new leadership is progressing steadily, although the benefits are expected to play out gradually over the coming quarters. With improving operational efficiency and early recovery in key segments, the company is likely to see gradual margin expansion.
Anand Rathi also noted an improvement in the demand environment, supported by a strong deal pipeline and increased traction from large clients. The brokerage highlighted that while deal conversions remain uneven, spending is largely driven by cost optimisation and modernisation initiatives. At the same time, artificial intelligence-related work is moving beyond pilot projects into larger, multi-year engagements embedded within client operations.
The brokerage added that Europe has started to move from stability to growth, supported by the recent telecom deal, while demand in the US appears to be stabilising. Despite this, certain risks remain, including pressure from lower-margin telecom deals, potential pricing impact due to productivity gains from GenAI, and delays in discretionary spending recovery. Overall, the company delivered a resilient performance even in a seasonally weak quarter, with telecom expected to be a key growth driver going forward, along with contributions from BFSI, manufacturing, and retail segments.
Deven Choksey Research highlighted that strong deal wins, improving margins, and higher contribution from large clients are enhancing earnings visibility over the medium term. Management remains confident of outperforming peers by FY27 and achieving an EBIT margin of around 15 percent, supported by operating leverage and efficiency gains from fixed-price contracts and AI-led execution.
The brokerage also pointed out that the company is adopting a more efficient talent strategy by redeploying internal resources instead of aggressive hiring, supported by improved utilisation tools. AI adoption is evolving into long-term, integrated programs, with new pricing models differentiating between human and digital work. However, the BFSI segment faced pressure due to furloughs and pricing adjustments in certain contracts, although new client wins indicate improving underlying demand.
Prabhudas Lilladher noted that revenue growth in Q3FY26 exceeded expectations, supported by strong performance in the communications segment and seasonal strength in certain geographies. Growth was broad-based across most verticals, except BFSI, which declined due to productivity-related adjustments. The brokerage highlighted that deal momentum remains strong, with total contract value growing significantly and maintaining a healthy quarterly run rate.
Management has expressed confidence in sustaining growth in the communications segment, supported by the recent large telecom deal, which is expected to contribute meaningfully over time. The brokerage believes that ongoing cost optimisation initiatives and operating leverage from growth could support further margin expansion in the coming periods.
ICICI Securities also highlighted that the company has delivered its first broad-based strong performance since the new leadership took charge. Management has reiterated its target of outperforming large-cap peers by FY27, driven by improving deal wins, market share gains in key verticals, and faster growth in large client accounts. While macro recovery and increased spending could provide upside, risks remain from regulatory changes and geopolitical uncertainties.
What Are The Estimates?
In terms of estimates, Motilal Oswal expects revenue of around Rs. 14,700 crore in Q4FY26, reflecting a growth of about 9.7 percent year-on-year and 2.1 percent sequentially. EBITDA is estimated at Rs. 2,500 crore with a margin of 17 percent. Profit after tax is expected at Rs. 1,600 crore, implying a growth of about 33.3 percent year-on-year and 45.5 percent quarter-on-quarter, with a PAT margin of 10.8 percent.
Anand Rathi estimates revenue at Rs. 14,423 crore, indicating a growth of about 7.6 percent year-on-year and 0.2 percent sequentially. EBITDA is expected at Rs. 2,426.9 crore with a margin of 16.82 percent. Profit after tax is projected at Rs. 1,513 crore, reflecting a growth of about 26.1 percent year-on-year and 37.5 percent sequentially, with a PAT margin of 10.49 percent.
Deven Choksey Research expects revenue of Rs. 14,541 crore, implying a growth of about 8.5 percent year-on-year and 1 percent sequentially. EBITDA is estimated at Rs. 2,388.7 crore with a margin of 16.42 percent. Profit after tax is projected at Rs. 1,461.6 crore, reflecting a growth of about 21.8 percent year-on-year and 32.9 percent quarter-on-quarter, with a PAT margin of 10.05 percent.
Prabhudas Lilladher estimates revenue at Rs. 14,600 crore, indicating a growth of about 9 percent year-on-year and 1.4 percent sequentially. EBITDA is expected at Rs. 2,400 crore with a margin of 16.4 percent. Profit after tax is projected at Rs. 1,800 crore, reflecting a growth of about 50 percent year-on-year and 63.6 percent sequentially, with a PAT margin of 12.32 percent.
ICICI Securities expects revenue of Rs. 14,626.7 crore, implying a growth of about 9.2 percent year-on-year and 1.6 percent sequentially. EBITDA is estimated at Rs. 2,394.7 crore with a margin of 16.37 percent. Profit after tax is projected at Rs. 1,854.6 crore, reflecting a growth of about 54.6 percent year-on-year and 68.6 percent quarter-on-quarter, with a PAT margin of 12.67 percent.
Overall, the outlook for Tech Mahindra remains gradually improving, supported by strong deal wins, early recovery in the communications segment, and continued progress in restructuring initiatives. However, margin pressures, uneven deal conversion, and weak discretionary spending remain key factors to watch in the near term.
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