CLSA has a price target of ₹1,976 on the stock, which implies a potential upside of 32% from Monday’s closing levels.
CLSA mentioned in its note that Tech Mahindra is sticking to its three-year turnaround plan announced in April 2024 and appears on track to meet its FY27 targets of 15% EBIT margin, 30% ROCE, and revenue growth above the industry average.
CLSA added that the operational parameters achieved so far, both on the revenue and cost fronts, give it a high level of confidence in Tech Mahindra achieving its FY27 targets.
The brokerage further said that with recent developments in the US tariff war, CLSA believes the macro environment is now more supportive of a rerating.
Further advancements in US corporate tax cuts, deregulation, and potential interest rate cuts for the remainder of 2025 should be positive for the entire Indian IT sector, and even more so for Tech Mahindra, CLSA wrote in its note.
Tech Mahindra reported a constant currency revenue decline of 1.5% for the January to March period.
In US Dollar terms, the company’s revenue stood at $1,549 million, while in rupee terms, Tech Mahindra’s topline stood at ₹13,384 crore.
Tech Mahindra’s net profit for the March quarter rose 19% on-year at ₹1,166.7 crore. EBIT rose 2.1% to ₹1,378 crore, while margin expanded by 10 basis points to 10.3%.
The company also recommended a final dividend of ₹30 per equity share for the financial year ended March 31.
Shares of Tech Mahindra Ltd. settled with gains of 5.36% at ₹1,573 on Monday. The stock is down 8% so far in 2025.
