Hold Tech Mahindra; target of Rs 1490: ICICI Securities

ICICI Securities research report on Tech Mahindra

Tech Mahindra (TechM) delivered a healthy beat on both revenue and margins in Q2FY26. However, turnaround is progressing at a slower pace. Management acknowledged its slower-than-expected recovery in demand and believes further revenue and margin gains will be more challenging, as initial operational efficiencies have been realised. TechM pointed to a sluggish macro environment, which has tempered its growth expectations for FY27 vs. those laid out at the start of its turnaround journey. Despite these headwinds, management is holding firm on its target of achieving a 15% EBIT margin by the end of FY27.

Outlook

We continue to value TechM at 19x P/E on Sep’27E EPS of INR 79 to arrive at our TP of INR 1,490. Upgrade to HOLD (earlier Reduce) on correction in stock price by 7% over the last three months.

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