Financials & valuation: Tech Mahindra

Research evidence excerpt

Financials & valuation: Tech Mahindra

16 July 2026

Tech Mahindra (TECHM IN) Equities IT Services

Buy: 1Q27 – Strong all-around performance India

◆ 1Q was better than expectations with growth accelerating to MAINTAIN BUY

+6% y-o-y and the 2Q/FY27 outlook buoyant

TARGET PRICE (INR) PREVIOUS TARGET (INR)

◆ EBIT margin expansion stays on track as well to achieve

1635.00 1635.00 15% in FY27; 2Q margins 14.4%

◆ Better growth than peers justifies the valuation premium; SHARE PRICE (INR) UPSIDE/DOWNSIDE

maintain Buy with INR1,635 TP (unchanged) 1498.70 +9.1%

(as of 15 Jul 2026)

TechM continues to deliver against its margin expansion commitment, reporting MARKET DATA

Market cap (INRm) 1,468,813 Free float 65%

1Q EBIT margins of 14.4%. More notably, it achieved near industry-leading revenue Market cap (USDm) 15,259 BBG TECHM IN

growth of +6% in 1Q among larger peers. The growth mix also looks encouraging, 3m ADTV (USDm) 42 RIC TEML.BO

with more than seven clients added to the USD50m+ revenue bracket over the past FINANCIALS AND RATIOS (INR)

four quarters, alongside ex-telecom revenue growth of 8.5% y-o-y in USD terms. Year to 03/2026a 03/2027e 03/2028e 03/2029e

HSBC EPS 51.90 67.73 88.60 93.21

Deal momentum remains robust, with more than USD1bn in wins in 1Q as well, HSBC EPS (prev) 51.90 79.94 88.46 93.02

Change (%) 0.0 -15.3 0.2 0.2

which should help underpin growth over the near term. While 1Q benefited from a Consensus EPS 58.03 78.04 85.40 92.53

one-off client delivery, 2Q is expected to be supported by favourable Comviva PE (x) 28.9 22.1 16.9 16.1

Dividend yield (%) 3.4 4.7 5.0 5.0

seasonality and the ramp-up of large telecom engagements. Overall, management EV/EBITDA (x) 15.3 12.1 11.5 10.8