Buy Tech Mahindra; target of Rs 1270: Emkay Global Financial

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26 Aug, 2025 12:21

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Emkay Global Financial's research report on Tech Mahindra

TechM gave further insights into its NXT.NOW growth strategy, focusing on connectivity, experience, cloud, engineering, and sustainability through differentiated offerings. The company also highlighted the progress made on large deals, client mining, and alliances to accelerate revenue growth while driving delivery excellence to steer margin expansion. The company expects the leadership transition to be smooth as it is a planned succession and executed diligently with a reasonable time period to transition to the new leader and the growth strategy laid out is unlikely to change. While management anticipates nearterm weakness in revenue growth, it is optimistic about its medium-term growth outlook, driven by 5G, cloud, engineering, sustainability, and Industry 4.0. Management unveiled its plan to focus on building a products and platform business and scaling up the co-creating business. The products and platform business is currently at ~USD450mn run rate and has the potential to scale to USD1bn in the next three years.

Outlook

We roll forward our TP to Mar-25E EPS and maintain Buy with a TP of Rs1,270 (earlier 1,220) at 16x its Mar-25E EPS, considering the anticipated improvement in the margin trajectory, better capital allocation, and reasonable valuation.

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Tech Mahindra - 06 -03 - 2023 - emkay