Buy Tech Mahindra; target of Rs 1900: Emkay Global Financial

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26 Aug, 2025 12:21

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Emkay Global Financial's report on Tech Mahindra

Tech Mahindra’s Q3FY22 revenue came ahead of expectations, but EBITM missed estimates. Revenue grew 4.1% QoQ to USD1,534mn (4.7% CC; organic 4% CC), led by CME (6.9%) and Enterprise (3.2%) verticals. EBITM declined 40bps QoQ to 14.8%. Net new deal wins were robust, with a TCV of USD704mn, split across CME (USD226mn) and Enterprise (USD478mn). The deal pipeline remains healthy, and management expects healthy deal win momentum to continue. Management remains confident of sustaining revenue growth momentum on the back of broad-based demand, uptick in 5G-led spending, healthy deal intake and deal pipeline, and robust demand for digital engineering, cloud, data & analytics services.

Outlook

We tweaked our FY22-24 EPS estimates by -1.9% to 0.1%, factoring in the Q3 performance, recent acquisitions and higher ETR. We maintain Buy with a TP of Rs1,900 at 25x Dec’23E EPS, considering the improving revenue growth trajectory, dividend payout and reasonable valuations post recent corrections (~16% down in 1M)

More Info

At 17:30 Tech Mahindra was quoting at Rs 1,455.05, down Rs 27.70, or 1.87 percent.

It has touched an intraday high of Rs 1,483.05 and an intraday low of Rs 1,449.90.

It was trading with volumes of 89,921 shares, compared to its thirty day average of 149,781 shares, a decrease of -39.97 percent.

In the previous trading session, the share closed down 1.61 percent or Rs 24.30 at Rs 1,482.75.

The share touched its 52-week high Rs 1,837.75 and 52-week low Rs 915.05 on 30 December, 2021 and 26 February, 2021, respectively.

Currently, it is trading 20.82 percent below its 52-week high and 59.01 percent above its 52-week low.

Market capitalisation stands at Rs 141,280.88 crore.

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