Tech Mahindra Q2 Results Preview: What to Expect from the IT Major

Tech Mahindra Ltd. will report its Q2 FY26 results on October 14, and analysts expect a modest improvement in operating performance, with profit seen up 13% quarter-on-quarter and margins largely stable despite higher costs and subdued demand in the communications segment.

Turnaround Plan in Focus

The focus will be on the company’s progress in its turnaround plan, particularly in communications and BFSI, where management is aiming to stabilise growth and lift profitability. The H-1B visa fee hike, which imposes a $100,000 charge on new petitions, is also likely to feature in management commentary, given its potential impact on operating costs for Indian IT firms such as Tech Mahindra, one of the largest visa users in the industry.

Revenue Growth Expectations

Brokerages expect revenue growth between 0.7% and 0.8% in constant currency terms, driven by steady deal ramp-ups and stable performance in the communications vertical. Analysts see sequential growth supported by improved execution of large deals and traction in enterprise, banking and retail segments, though the telecom business is expected to remain flat. Deal wins are projected in the range of $600 million to $800 million for the quarter, according to Jefferies and Nomura.

Margin Expansion

Margin is expected to expand modestly, with most analysts projecting gains of 40–90 basis points from cost optimisation and currency tailwinds. HSBC expects margin support from rupee depreciation, while Goldman Sachs and InCred see benefits from operating leverage and efficiency initiatives. Headcount is likely to remain flat as the company focuses on utilisation and cost control.

Key Expectations

• Revenue seen 3% higher at Rs 13,778 crore versus Rs 13,351 crore
• Profit seen 13% higher at Rs 1,285 crore versus 1,141 crore
• EBIT seen 9% higher at Rs 1,609 crore versus Rs 1,477 crore
• EBIT margin seen at 11.67% versus 11.06%

Analyst Expectations

Here’s what analysts are expecting from Tech Mahindra Q2 results:

• Revenue growth expected to improve sequentially in Q2, supported by momentum in deal wins.
• Large deals have shown an improving trend, which analysts will continue to monitor.
• EBIT margin expected to improve quarter-on-quarter due to cost efficiencies and better topline performance.
• Headcount likely to remain flat sequentially.
• Revenues expected to rise 0.8% quarter-on-quarter in constant currency, aided by the ramp-up of large deals.
• Cross-currency tailwind expected to be about 80 basis points.
• Margins likely to expand by 90 basis points, supported by currency benefits and cost efficiencies.
• Deal wins expected in the range of $600 million to $800 million.

Focus Areas

Focus areas include turnaround progress, growth in communications and BFSI, and the impact of the H-1B visa fee hike on margin guidance.

Constant currency revenue growth seen at 0.8%, led by stability in telecom and traction in financial services and retail.

EBIT margin expected to expand, supported by growth, operating efficiency, and leverage benefits.

Key monitorables include FY26 revenue and margin outlook, organisational restructuring updates, and commentary on the communications and enterprise businesses.

Conclusion

Tech Mahindra’s Q2 results will be closely watched by investors and analysts, who will be looking for signs of improvement in the company’s operating performance and progress in its turnaround plan. With revenue growth expected to improve sequentially and margins likely to expand, the IT major is poised to deliver a modestly positive earnings report.

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