Accumulate Tech Mahindra; target of Rs 1805: Deven Choksey

Deven Choksey recommended accumulate rating on Tech Mahindra with a target price of Rs 1805 in its research report dated January 19, 2026.

Broker Research

January 20, 2026 / 11:32 IST

Accumulate

Deven Choksey report on Tech Mahindra

Revenue stood at INR 1,43,932 Mn, up 2.8% QoQ and 8.3% YoY, ahead of our estimate by 4.1%, driven by broad-based growth across communications, manufacturing, and retail verticals, alongside a strong 11.2% YoY growth in the European market. EBIT came in at INR 18,919 Mn, up 11.3% QoQ and 40.1% YoY, sequential improvement was supported by improved operating disciplines, pricing discipline, and the ongoing benefits of the Project 40s efficiency program. EBIT margin stood at 13.1%, as margin expansion was driven by fixed-price project productivity, volume growth, and higher IT utilization, which improved to 86.6% during the quarter. PAT was at INR 11,220 Mn, down 6.1% QoQ and up 14.1% YoY, due to a one-time exceptional provision of INR 2,724 Mn (USD30 Mn) made in accordance with new wage code notifications. IT services segment revenue rose to INR 1,20,756 Mn, up 2.6% QoQ, while the BPS segment grew 4.0% QoQ to INR 23,176 Mn; the share of IT stood at ~84% and BPS at ~16% of total revenue.

Outlook

We have rolled our valuation basis to Dec’27 estimates. We value Tech Mahindra at 23.0x implying a target price of INR 1,805 however, given the sharp run-up in the stock price, we downgrade our rating from “BUY” to “ACCUMULATE” at current levels.

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