Buy Tech Mahindra; target of Rs 1950: Sharekhan

Sharekhan's research report on Tech Mahindra

Revenues stood at $1,589 million, up 0.7% q-o-q/ 1.2% y-o-y in CC terms, beating our estimates of $ 1,577 million. EBIT margin rose by ~110 bps q-o-q to 9.6%, beating our estimates of 9.0%.Net new deal win TCVs stood at $603 million, up 13% q-o-q. Margins are expected to steadily recover under Project Fortius, with the management prioritising margins over securing large deals.

Outlook

We maintain Buy with a revised price target of Rs 1950 (valued at 26x Sep26E EPS). At CMP, the stock trades at 33/25.3/20x its FY25/26/27E EPS.

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