Tech Mahindra Limited Just Missed Earnings - But Analysts Have Updated Their Models

Tech Mahindra Limited (NSE:TECHM) last week reported its latest third-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like the results were a bit of a negative overall. While revenues of ₹133b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.2% to hit ₹11.08 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Tech Mahindra

Taking into account the latest results, the consensus forecast from Tech Mahindra's 44 analysts is for revenues of ₹573.2b in 2026. This reflects a notable 9.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 48% to ₹62.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹577.5b and earnings per share (EPS) of ₹63.50 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of ₹1,715, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Tech Mahindra, with the most bullish analyst valuing it at ₹2,030 and the most bearish at ₹1,050 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Tech Mahindra's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 7.3% growth on an annualised basis. This is compared to a historical growth rate of 9.2% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% annually. Factoring in the forecast slowdown in growth, it looks like Tech Mahindra is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ₹1,715, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Tech Mahindra going out to 2027, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Tech Mahindra that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.