Tech Mahindra Share Price After Q4 Results: This Mahindra Stock Falls 3%, Recommends Rs 36/Dividend; BUY/SELL?

Tech Mahindra share price dropped by 3% despite the company reporting 16% YoY growth in consolidated net profit to Rs 1,354 crore in the fourth quarter of FY26. As per experts, the Mahindra Group's tech giant's revenue and margins are largely in-line with estimates; however, profitability missed market expectations of Rs 1,470 crore. Despite this, analysts believe Tech Mahindra's FY27 margin trajectory remains on track.

Accordingly, JM Financial has revised its target price on Tech Mahindra higher but maintained the ADD rating. Apart from Q3, Tech Mahindra has also declared one of the highest dividend payouts in the IT sector for Q4FY26, to the tune of Rs 36 per share.

Tech Mahindra Share Price:

At the time of writing, Tech Mahindra traded at Rs 1427 apiece, down by Rs 35.85 or 2.5% on BSE, with market cap of Rs 1,39,823.35 crore. In the early trade, the stock fell by over 3% to hit an intraday low of Rs 1418 apiece.

Tech Mahindra Q4 Results:

During the fourth quarter, the company posted net profit of Rs 1,354 crore, up by 16% YoY. While EBIT stood at Rs 2,084 crore and revenue was at Rs 15,076 crore, registering an upside of 48.3% and 12.6% year-on-year. EBIT and revenue surged by 10.2% and 4.7% sequentially.

Analysts at JM Financial said, "Tech Mahindra reported 4QFY26 results - revenues and margins were largely inline. Revenue growth came in at 0.6% cc QoQ vs expectation of 0.4% cc QoQ. EBIT margins at 13.8% - inline versus JMFL and consensus expectations."

However, net profit were a miss as JM expected Rs 1,470 crore income in Q4FY26.

Nonetheless, the forward looking indicators for Tech Mahindra are --- ) LTM new TCV grew ~42% YoY in FY26 versus ~43% YoY new TCV growth in FY25 (LTM book to bill of 0.59x in FY26 versus 0.43x in FY25). ii) Headcount saw a slight decline -1.3% QoQ / -0.7% YoY. iii) Management commentary - confident of doing better than the industry growth and achieve 15% EBIT margins in FY27. Industry growth is expected to be 2-4% or 3-5%.

Tech Mahindra Dividend:

The company has recommended final dividend of Rs 36 per share with a face value of Rs 5 each for FY26. In percentage terms, the dividend payout is of 720%.

The Final Dividend recommended is in addition to Interim Dividend of Rs. 15/- per Equity Share on Face
Value of Rs. 5/- each i.e. 300% paid by the Company in November 2025.

Accordingly, for FY26, Tech Mahindra is rewarding at least Rs 51 dividend per share which is 1020%.

For the final dividend, Tech Mahindra fixed July 3, 2026, as the record date to identify eligible shareholders.

Tech Mahindra Share Price Recommendation:

On the valuation, JM analysts said, "Tech Mahindra has executed well on margins - already factored in the valuations, in our view. Valuations are at 19x FY27 consensus EPS, at c.7% premium to the sector. We revise our EPS estimates marginally over FY27-28E, incorporating 4Q results. Maintain target multiple of 19x Sep 27 - revised TP of Rs 1,555 (versus Rs 1,550 earlier). Maintain ADD."

They also added, "Post 4 large Indian IT results, debate in the industry is - i) Is there a risk to FY27 industry growth of 4% YoY? Infosys results and FY27 revenue guidance (on April 23rd) will likely provide clarity on the industry growth, in our view. ii) Is there a possibility that the cautious commentary of HCLT will likely impact peers with a quarter delay - to be monitored, in our view. We prefer stocks underpinned by reasonable operational visibility in the current macro environment."

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