Tech Mahindra gains as $1.08bn deal wins lift growth outlook
Tech Mahindra shares surged after better-than-expected quarterly revenue and a third consecutive quarter of billion-dollar deal bookings prompted analysts to raise their growth and earnings forecasts.
Shares of Tech Mahindra climbed as much as 3.5 per cent on Friday after the Indian IT services provider reported quarterly revenue that exceeded expectations. The stock was last trading up 1.8 per cent at 1,537.5 rupees, making it one of the top gainers on both the benchmark Nifty 50 index and the Nifty IT index.
The upbeat market reaction was driven by a sustained acceleration in new business. Net new order bookings increased to $1.08 billion, up from $809 million a year earlier. This marks the third consecutive quarter that the company has secured more than $1 billion in new deals, signalling strong demand for its services.
Analysts responded by upgrading their financial models for the company. Nomura lifted its fiscal 2027 revenue growth forecast to 5.9 per cent, up from a previous estimate of 5.1 per cent. The brokerage cited the company's robust growth momentum and management's guidance that revenue growth will outpace the broader industry average this year.
Profitability metrics also attracted attention from the market. BOB Capital Markets noted that Tech Mahindra remains on schedule to hit its three-year target of achieving a 15 per cent operating margin by fiscal 2027. Separately, Jefferies raised its earnings per share estimates for the fiscal 2027 to 2029 period by 6 to 8 per cent.
The stock's outperformance on Friday, leading the broader Nifty IT index which was up 1 per cent, highlights how sharply market sentiment has shifted. For institutional investors tracking the Indian IT sector, the results indicate that Tech Mahindra's operational improvement plan is translating into tangible financial progress.
The combination of top-line expansion and improving margins is reshaping Tech Mahindra's standing among its peers. With deal wins consistently exceeding the billion-dollar threshold, the company is demonstrating an ability to capture market share. The upward revisions from major brokerages suggest investors now view the firm as a potential outperformer in India's competitive IT services sector.
