Tech Mahindra's growth targets get a cautious nod from Citi Research

Tech Mahindra is committed to improving both growth and margins, with a strong emphasis on organic growth.

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26 Aug, 2025 12:21

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Citi has hiked the target price for Tech Mahindra's shares to Rs 1,150 from Rs 1,095 while also maintaining its 'Sell' rating. Although Citi expressed confidence in Tech Mahindra's goals for the coming years, it remains cautious.

The current market price of Tech Mahindra is much higher than the target set by Citi. In the previous session, Tech Mahindra's shares closed flat at Rs 1,400. Tech Mahindra's shares have been gaining in the past four sessions.

The company's shares have gained 9 percent in the past six months, keeping pace with the Nifty 50 which gained almost 10 percent during the same period.

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Citi is confident that Tech Mahindra will achieve top-line growth surpassing the peer average by FY27, coupled with EBIT margins of around 15 percent. The company's EBIT margin or operating margin came in at 7.4 percent in Q4 FY24 which was an improvement from the previous quarter's 5.4 percent.

Tech Mahindra is committed to improving both growth and margins, with a strong emphasis on organic growth. Management's focus on "scale at speed" highlights its priorities and determination to drive the company forward, said Citi in a note.

Also Read | Tech Mahindra's Q4 earnings miss prompts brokerages to cut growth targets

Despite these ambitious targets, Citi notes that turnarounds in large-cap IT companies have historically been challenging. The key to Tech Mahindra’s success, according to Citi, will be the effective execution of its strategies. While the management is confident in meeting its FY27 targets, the market will be closely watching how these plans unfold in the coming quarters, Citi said.

Tech Mahindra reported a 41 percent fall in net profit to Rs 661 crores year-on-year for Q4 FY24, driven by a slowdown in key verticals including telecom, communications, media and entertainment. Sequentially, net profit was up by 29.5 percent.

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