Motilal Oswal's research report on Tech Mahindra
Tech Mahindra (TECHM) reported 1QFY26 revenue of USD1.6b, down 1.4% QoQ in constant currency (CC) vs. our estimate of 1.0% cc decline. Communications/Manufacturing grew 2.8%/4.0% QoQ. BFS/Retail were down 0.6%/1.0% QoQ. EBIT margin was up 60bp QoQ at 11.1%, beating our estimate of 10.7%. PAT stood at INR11.4b (down 2.2% QoQ/up 33% YoY), below our estimate of INR12b. In INR terms, revenue/EBIT/PAT grew 2.7%/34.0%/34.0% YoY. In 2QFY26, we expect revenue/EBIT/PAT to grow by 3.9%/31.0%/9.1% YoY.
Outlook
We reiterate BUY on TECHM with a TP of INR2,000 (implying 24% upside), based on 25x FY27E EPS.
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