If you’ve been watching the Indian IT sector lately, you know it's been a bit of a rollercoaster. Honestly, Tech Mahindra has often been the "problem child" in the portfolio of many retail investors. While the big brothers like TCS or Infosys were cruising, Tech Mahindra seemed to be constantly fixing its shoes. But things changed fast on Friday, January 16, 2026. The Tech Mahindra share value didn't just move; it leaped.
The stock jumped over 5% to close around ₹1,670.55. This wasn't just some random market noise. It was the reaction to a Q3 FY26 earnings report that basically told the market, "Hey, the turnaround is actually working."
The Numbers Nobody Expected
Most people look at the headline profit and move on. Don't do that. You've gotta look at the "deal wins." For the quarter ending December 2025, Tech Mahindra clocked a net profit of ₹1,122 crore. That's a 14.1% jump year-on-year.
But here is the kicker: their new deal wins (TCV) hit $1.1 billion. That is massive. It’s a 47% increase compared to the same time last year. When CEO Mohit Joshi says this is the highest deal-win run-rate in five years, he isn't just puffing his chest. He’s pointing to a pipeline that’s finally starting to flow after years of stagnation.
Why the 13.1% Margin Matters
Operating margins—basically how much money stays in the pocket after paying everyone—hit 13.1%. Now, compared to a company like TCS, that might seem low. But for TechM, it’s the ninth consecutive quarter of margin expansion. CFO Rohit Anand has been obsessed with "working capital discipline." Basically, they’re getting better at collecting bills and managing costs.
They even ate a ₹272 crore one-time cost related to labor codes this quarter and still beat expectations. That tells you the underlying business is becoming a lot more resilient.
What's Driving the Change?
It’s easy to say "it's just the market," but that’s lazy. There are three specific things happening under the hood that are shifting the Tech Mahindra share value trajectory.
- The Joshi Effect: Mohit Joshi, the former Infosys veteran, is executing "Project Fortius." Originally, the goal was a 15% margin by March 2027. Now, he’s pushing the team to hit that by March 2025 or early 2026. He's impatient, and for shareholders, that’s usually a good thing.
- AI Everywhere: They aren't just talking about AI in brochures. They’ve upskilled over 80,000 employees in Generative AI. They even launched "Project Indus," a large language model specifically for Hindi and its various dialects. This isn't just a gimmick; it’s about winning specialized contracts in the domestic and global markets that others can't touch.
- Europe’s Surprise Comeback: While everyone was worried about a US recession, Tech Mahindra’s Europe business grew by over 11% this year. Their deep roots in the automotive and aerospace sectors are paying off as European companies finally pull the trigger on digital transformation.
The Risks: It’s Not All Sunshine
Look, I'd be lying if I said this was a guaranteed moonshot. There are some real headaches.
First off, the headcount is shrinking. They lost about 4,671 employees year-on-year. Management calls it "efficiency," but it also reflects a cautious hiring environment. If they want to grow revenue by double digits, they eventually have to stop shrinking the team and start growing it again.
Secondly, the BFSI (Banking, Financial Services, and Insurance) segment declined about 6.2% sequentially. That’s a huge part of the IT pie. If banks aren't spending, Tech Mahindra has to work twice as hard in other sectors like retail or transport to make up the gap.
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Dividend Reality Check
One thing people love about Tech Mahindra is the dividend. Right now, the forward dividend yield is sitting around 2.6% to 2.8%. They recently paid out ₹15 per share in November 2025. If you're an income investor, this stock is way more attractive than many of its peers who prioritize growth over payouts. Just remember: dividends are great, but they don't help if the share price is tanking. Luckily, the current trend suggests both might be working in tandem for once.
What Experts Are Saying (And Doing)
Investment bigwigs like Kotak have recently hiked their price targets to around ₹1,800. They’re betting that the "valuation gap" between Tech Mahindra and the Tier-1 IT players will narrow. Basically, TechM used to be priced like a laggard. Now, it's starting to be priced like a "credible challenger."
However, you'll find some analysts who are still skeptical. They want to see if this margin growth is sustainable once the easy cost-cutting is done. It’s a classic bull vs. bear case.
How to Think About This for Your Portfolio
If you’re looking at the Tech Mahindra share value as a long-term play, you have to ask yourself: Do I trust the management’s 2027 roadmap?
Actionable Insights for Investors:
- Watch the ₹1,730 Level: That’s the 52-week high. If the stock breaks and stays above that with high volume, it signals a new bullish phase.
- Monitor Attrition: At 12.3%, their attrition is stable. If this starts spiking, it means they’re losing the talent they need for those $1 billion deals.
- Check the US Interest Rates: Since most of their revenue comes from overseas, any major shift in US Fed policy in 2026 will hit this stock harder than a domestic sector like FMCG.
- Don't Ignore the "Mahindra" Factor: Being part of the Mahindra & Mahindra group gives them a stability and "corporate governance" premium that smaller IT firms just don't have.
Basically, Tech Mahindra isn't the "cheap" IT stock anymore. It's a company in the middle of a massive identity shift. It’s moving from a telecom-heavy provider to a diversified, AI-first powerhouse. It’s been a slow grind, but the January 2026 numbers suggest the heavy lifting might finally be over.
Next Steps for You:
Check your portfolio allocation for the IT sector. If you are overweight on mid-caps, Tech Mahindra offers a "Large-cap safety with Mid-cap growth" profile right now. You might want to set a price alert for ₹1,640—if it dips back there, it could represent a solid "buy the disclosure" entry point before the next fiscal year's projections are released.