INSUBCONTINENT EXCLUSIVE:
Tech Mahindra shares fell as much as 2% on Thursday to Rs 1,575 on the BSE after the IT major reported a 34% year-on-year (YoY) rise in
consolidated net profit for Q1FY26 at Rs 1,141 crore, up from Rs 851 crore in the same quarter last year
However, the profit missed Street estimates of Rs 1,211 crore.Revenue for the quarter rose 2.7% YoY to Rs 13,351 crore, compared with Rs
reported an EBIT of Rs 1,477 crore, up 34% YoY.Read More: Tech Mahindra Q1 Results: Cons PAT surges 34% YoY to Rs 1,141 crore, misses Street
estimatesBrokerages had a mixed reaction to the results, with some highlighting the margin improvement and strong deal wins, while others
flagged weak revenue growth, tough macro conditions and stretched valuations
Here's how top brokerages are rating the stock post earnings:
Live EventsMotilal OswalMotilal Oswal reiterated its 'Buy' rating on Tech
Mahindra with a target price of Rs 2,000, implying a potential upside of 24% from current levels
appears achievable if growth improves
Despite revenue softness in some verticals, the brokerage sees the turnaround under the new leadership tracking well and maintained its
margin assumptions at 14.4% for FY27.NomuraNomura maintained a 'Buy' rating with a revised target price of Rs 1,810, down slightly from Rs
1,840, implying an upside of nearly 15%
progress on margins and expects revenue growth in FY26 to exceed FY25 levels
Nomura also flagged the strong deal pipeline and traction in the Telecom vertical as positives, despite macro pressure in the Auto space
EBIT margins are expected to expand to 13.7% by FY27, up from 9.7% in FY25.Emkay GlobalEmkay Global maintained a 'Reduce' rating with a
target price of Rs 1,600, suggesting a limited downside of around 1%
a concern and believes the current price already factors in a large part of the margin recovery story
It values the stock at 20x Jun-27E EPS.NuvamaNuvama also retained a 'Reduce' call with a target price of Rs 1,300, indicating a downside of
While deal wins were strong, the brokerage said margin expansion is likely to get tougher amid a weak macro and low growth.It believes that
Tech Mahindra continues to trade at a valuation similar to its large-cap peers despite an inferior margin and returns profile
maintained its 'Underweight' rating with a target price of Rs 1,555, which is marginally below the current market price
The brokerage flagged strong deal wins and improving margins as positives but raised concerns about deal-to-revenue conversion, weak
manufacturing outlook, and an overall tough macro.The brokerage warned that balancing growth and margins will become increasingly difficult
going forward.JefferiesJefferies stayed 'Underperform' with a target price of Rs 1,400, implying a downside of 11%
The brokerage acknowledged the profit beat but said it was driven by higher other income rather than operational strength.The firm remained
cautious on Tech Mahindra's ability to hit its 15% EBIT margin target by FY27, noting that it would require consistent 75 bps quarterly
Recommendations, suggestions, views, and opinions given by the experts are their own
These do not represent the views of TheIndianSubcontinent)
