Tech Mahindra Q2 Profit Jumps 33% to Rs 1,586 Crore; Board Recommends First Bonus Issue Since 2015

Tech Mahindra turned in one of the stronger results of the IT earnings season on Thursday evening, reporting a 32.7% year-on-year jump in consolidated net profit to ₹1,586 crore for the September quarter. Alongside the numbers, the board recommended a 1:1 bonus issue, the company's first since March 2015, and declared an interim dividend of ₹15 per share.

Margins did the heavy lifting

Revenue rose 15.6% from a year earlier to ₹16,180 crore. Operating profit grew much faster: earnings before interest and tax climbed 40.5% to ₹2,387 crore, lifting the EBIT margin by roughly 260 basis points to 14.8%. Net profit margin improved by 130 basis points to 9.8%, and diluted earnings per share came in at ₹17.84.

That margin expansion matters because Tech Mahindra has spent the past two years in a turnaround, cutting low-margin contracts and tightening costs after its profitability slipped well behind larger peers. A margin close to 15% narrows that gap, though it still trails the top tier of Indian IT services firms.

Deal wins point the right way

New deal wins totalled $1,023 million in total contract value, up 25.4% from a year earlier. Steady wins above the billion-dollar mark give the company better visibility on revenue for the coming quarters. Headcount stood at 1,52,206 at the end of the quarter, and trailing twelve-month IT attrition was 11.7%.

The order-book trend stands in contrast to Wipro, which reported on the same evening and said its large-deal bookings fell sharply from the June quarter.

What the bonus issue means for shareholders

Under the proposal, shareholders will receive one new fully paid ₹5 share for every share they hold on a record date that will be announced later. The bonus will be funded from the company's reserves and needs shareholder approval through a postal ballot. To make room for the extra shares, Tech Mahindra will raise its authorised share capital from ₹924.3 crore to ₹1,000 crore.

A bonus issue doubles the number of shares an investor owns, but the share price adjusts roughly in half on the ex-date, so the total value of a holding does not change on its own. Companies often use bonus issues to improve liquidity and signal confidence in their reserves.

The ₹15 interim dividend has a record date of Friday, October 23, 2026, so investors need to hold shares by then to receive it.

Set-up for Friday

The stock had already run up ahead of the announcement. Tech Mahindra shares rose 4.61% to close at ₹1,648.70 on Thursday, among the top gainers in a session where IT stocks led the benchmarks higher. Part of the good news may therefore be priced in, and Friday's trade will show whether the margin improvement and bonus are enough to extend the move.

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