Tech Mahindra shares rose 7.49% to ₹1,773.70 on the NSE on Friday, October 16, after the company released its Q2 FY27 results. The rally lifted the stock over 22% in the last five trading sessions. The surge followed a strong earnings report that beat expectations on revenue, EBIT and profit after tax. The company’s board also announced a 1:1 bonus issue to celebrate its 40th anniversary, allowing shareholders to receive one additional share for every share held.

The bonus shares are expected to be credited by December 15, according to a regulatory filing. This marks the first bonus issue by Tech Mahindra in 11 years; the last was a 1:1 issue in March 2015. The announcement was a highlight of the earnings release, which also detailed robust deal wins and a resilient order book. The company’s management expressed confidence in sustaining momentum amid challenging industry conditions and highlighted a target of a 15% EBIT margin for FY27.

Analysts offered mixed views on the results. CITI noted constant‑currency revenue growth of 2.4% quarter‑on‑quarter, beating its estimate of 1.7%, and an EBIT margin of 14.8% versus an estimate of 14.5%. CITI also pointed out that Tech Mahindra trades at a 10‑35% premium to peers and that sustained performance is required. CLSA highlighted a 0.2% revenue beat, a 2% EBIT beat and a 3% PAT beat, while noting a 25% year‑on‑year rise in the order book.

HSBC described the results as slightly better than expected, noting that the company remains among the fastest‑growing in the top‑eight peer group. HSBC expects Tech Mahindra to prioritise and sustain revenue growth of 6‑8% and believes the firm offers a strong growth pick‑up at a reasonable valuation. Nomura described the performance as a modest beat, with the stock trading at 18.1 times its FY28 estimated EPS of ₹91.2.

Jefferies highlighted an improving growth outlook, noting that margin expansion continues as expected but that a greater focus on growth could limit further margin expansion beyond FY27. The firm raised its FY27‑FY29 EPS estimates by 4‑6% and expects constant‑currency revenue and EPS compound annual growth rates of 6% and 12% respectively over FY27‑FY29.

Across the sector, IT stocks have remained investor favourites this week, buoyed by September‑quarter earnings of major IT services companies such as TCS, HCLTech, Tata Elxsi, Tata Technologies, Tech Mahindra and Wipro. The results have been relatively resilient, deal wins have remained strong, and management commentary has reflected confidence in business growth despite persistent global headwinds. This trend is described as an “anti‑AI trade” as investors rotate towards Indian IT services companies amid a global sell‑off in AI‑linked stocks.