Tech Mahindra Shares Slip 2% After Q2 Results; Revenue Up, PAT Declines

Tech Mahindra, one of India’s leading IT firms, saw its shares fall by 2% in early trading on Wednesday, October 15, following the release of its Q2 results for the ongoing financial year. The market reaction reflects investor caution despite the company reporting steady revenue growth.

Market Performance

On the BSE, Tech Mahindra shares touched an intraday low of ₹1,440.90, compared to the previous close of ₹1,468.15. By 9:55 am, the stock was trading at ₹1,460, down 0.56%.

Key Highlights of Q2 Results

Tech Mahindra posted moderate growth in its September quarter performance:

• Revenue from Operations: ₹13,995 crore, up 5.12% year-on-year (YoY). Growth was driven by an uptick in deals across BFSI, retail, and manufacturing sectors.
• Profit After Tax (PAT): ₹1,195 crore, down 5% YoY, missing expectations.

The revenue growth signals steady demand, but the dip in PAT indicates margin pressures and cautious investor sentiment.

Company Insights

Despite the muted profit performance, Tech Mahindra continues to strengthen its business fundamentals. The company’s recent quarters have shown:

• Strong sequential growth fueled by new deal wins.
• Stability in its top telecom account, with limited client-specific challenges.
• Strategic focus on high-value accounts (USD 20 million+), setting the stage for potential improvement in the second half of the fiscal year.

Margins are inching closer to the 15% target, though current levels of around 12% remain below historical averages of 13–14%. Revenue growth, while positive, still lags behind larger peers in the IT sector.

Summary

Tech Mahindra’s Q2 results paint a picture of steady operational performance tempered by cautious growth expectations. Revenue has expanded across key sectors, but profit contraction and margin pressures reflect the challenges in sustaining high growth. Investors are weighing these factors as the stock reacts in early trading.

With continued focus on high-value clients and margin improvements, Tech Mahindra is gradually positioning itself for sustainable growth, though visibility remains limited for the near term.