Buy Tech Mahindra; target of Rs 1950: Sharekhan

Sharekhan's research report on Tech Mahindra

Reported revenue stood at $1,568 million, up 1.2% q-o-q/ 1.3% y-o-y in CC terms, beating our modest estimates of 0.3% q-o-q growth in CC terms. EBIT margin expanded by ~60 bps q-o-q to 10.2%, beating our estimate of 9.8%. New deal win TCVs stood at $745 million, up 24% q-o-q/96% y-o-y. Management expects CY25 to be better than CY24. Wage hike is anticipated for Q4 and is expected to impact margins by 100-150 bps.

Outlook

We maintain BUY with an unchanged PT of Rs. 1,950. At CMP, the stock trades at 32.9/25.8/20.5x its FY25/26/27E EPS.

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