Tech Mahindra Stock
Following the IT giant’s December quarter results, Tech Mahindra Ltd. (TechM) surged 4% and was the Sensex’s largest gainer on Monday. In terms of sales and profitability, the IT major surpassed Q3 figures. Growth visibility was provided by deal wins that lasted into the fifth quarter. As the IT company strives for better-than-peer growth in FY27, analysts said that the transaction pipeline remained robust.
TechM was up 3.8% at Rs 1,734.05 per stock on the BSE at 9:35 p.m. However, the benchmark BSE Sensex was down 437 points, or 0.5%, at 83,141.05.
According to Nomura India, TechM reported constant currency (CC) revenue growth of 1.7% QoQ, above both the consensus estimate of 0.7% and its own projection of 1%. The brokerage stated that the EBIT margin, at 13.1%, above both the consensus forecast of 12.7% and Nomura’s projection of 12.7%.
“To account for the 3QFY26 achievement and higher revenue and margin projections for FY27-28F, we adjust FY26F-28F EPS by 3%. We slightly increase our goal to Rs 1,810 (from
Rs 1,750), with a fixed 23 times 1H FY28F EPS. According to the press release, TechM is now trading at 22.2 times FY27F EPS of Rs 75.30.
Seasonality will have an impact on Q1FY27, where growth pressure will be noticed, according to IT, which expects a favorable exit for Q4. According to the MOFSL, a 15% EBIT margin for FY27 is currently attainable. It thinks that the TechM may now focus on expansion.
“The setting is favorable: telecom bottoming out, solid transaction TCV, and the resumption of big deals are all encouraging indicators. Large deal conversion, in our opinion, is the most important monitorable factor,” it stated.
TechM’s bottom-up recovery tale continues to appeal to this brokerage. With a goal of Rs 2,350 (41% upside), it valued Tech Mahindra at 26 times FY28 profits.
According to Nirmal Bang, TechM’s Q3 results showed that the company’s transformation path, which was started under CEO Mohit Joshi’s guidance, was still growing. It stated that while margin increase is good, a more optimistic picture requires continued growth acceleration, especially in the telecom vertical.
“Under the new leadership, the company’s focus on acquiring high-quality clients, its aggressive Gen AI strategy, its commitment to operational efficiency through Project Fortius, and focus on large deals are positive factors,” it stated when suggecting a target of Rs 1,792.
FAQs
Why did Tech Mahindra shares jump 4% recently?
Tech Mahindra (TechM) shares surged 4% following strong Q3FY26 results, beating both revenue and profitability estimates, and becoming the top gainer on the Sensex.
What were TechM’s Q3FY26 financial highlights?
TechM reported constant currency revenue growth of 1.7% QoQ (higher than the consensus estimate of 0.7%) and an EBIT margin of 13.1%, above forecasts of 12.7%.
What is driving Tech Mahindra’s growth in FY27?
Key drivers include robust deal wins, expansion in the telecom sector, a strong transaction pipeline, and strategic initiatives like Project Fortius and the Gen AI strategy.
What is the current stock price and valuation of TechM?
TechM was trading around Rs 1,734 per share on the BSE, with a forward FY27F P/E of 22.2 times and target prices from analysts ranging from Rs 1,810 to Rs 2,350.
What do analysts say about TechM’s future outlook?
Analysts from Nomura, MOFSL, and Nirmal Bang expect continued growth, margin improvement, and upside potential, citing strong client acquisitions, deal conversions, and telecom sector recovery.
What is Project Fortius and its impact on TechM?
Project Fortius is Tech Mahindra’s operational efficiency initiative, aimed at improving margins and driving profitable growth across verticals, including telecom and IT services.
How does seasonality affect Tech Mahindra?
Growth pressure is expected in Q1FY27 due to seasonality, but the company expects a favorable exit in Q4, supported by large deal conversions and a strong order book.
Who is leading Tech Mahindra’s transformation?
CEO Mohit Joshi is spearheading TechM’s transformation, focusing on high-quality client acquisitions, operational efficiency, and strategic growth in emerging areas like Gen AI.
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