Tech Mahindra shares jump 8% on robust Q2 profit growth and 1:1 bonus share announcement

What happened

Tech Mahindra shares surged over 8% on Friday, adding nearly Rs 11,000 crore to the company's market capitalisation following strong second-quarter earnings and the announcement of a 1:1 bonus share issue. The stock climbed to Rs 1,781.50 on the BSE, pushing the firm's total market value to Rs 1,72,895.16 crore and leading a rally across domestic IT equities.

The board recommended issuing one additional share for every share held to celebrate Tech Mahindra's 40th anniversary. Expected to be credited by December 15, the proposal represents the company's first bonus issue in 11 years, following its previous 1:1 allotment in March 2015.

Financial performance and Q2 gains

For the July-September quarter, Tech Mahindra reported a 32.74% year-on-year increase in consolidated net profit attributable to owners, reaching Rs 1,585.6 crore compared with Rs 1,194.5 crore during the same period last year. Revenue from operations expanded 15.6% to Rs 16,180.2 crore, up from Rs 13,994.9 crore.

Compared with the preceding quarter, net profit grew 8% while revenue rose 3%. The company noted that performance was driven by volume growth, disciplined cost savings, strategic deal wins, and favourable currency movements.

IT sector rally and market reaction

The earnings surprise sparked broad gains across India's technology space, lifting the Nifty IT index by 3% and helping national benchmark indices shake off an muted start. While Asian markets faced pressure from global developments, domestic equities drew support from strong earnings and steady economic fundamentals.

Other major technology firms shared in the momentum. Infosys advanced nearly 4%, TCS rose 3.26%, and Wipro gained 5.7% after posting revenue above estimates. HCLTech also finished more than 1% higher.

Growth outlook and analyst estimates

Market consensus following the earnings release projects full-year revenue for 2027 at Rs 6,470 billion, representing a 5.4% increase over the past 12 months. Statutory earnings per share are expected to surge 22% to Rs 76.15.

Analysts updated the consensus target price for the stock to Rs 1,747, with bullish estimates reaching as high as Rs 2,000 per share. The strong corporate results confirm steady operational momentum across India's IT services sector.