Buy Tech Mahindra: target of Rs 1650: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research report on Tech Mahindra

Q4FY22 revenues were in-line, but EBIT margin lagged our estimates; Q4 saw strong deal intake, healthy deal pipeline, good client mining and logo additions. Net new order intake grew by 44% q-o-q to $1.01 billion. Company is well-placed to deliver strong revenue growth in the next few years given strong deal wins, active participation in the transformation activities within telecom ecosystem and strong demand for its both BPS and XDS practices. Strong revenue growth, pricing leverage, higher utilisation, increased offshoring and reduced subcontractor expenses would negate the margin headwinds in FY2023E. USD revenue/earnings would clock a CAGR of 13.7%/14.3%, respectively, over FY22-FY24E.

Outlook

We maintain a Buy on TechM with a revised PT of Rs. 1,650, given robust deal wins, picking up of 5G spends and reasonable valuation. The stock trades at 15x FY2024E EPS.

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