Introduction
Tech Mahindra has been around since 1986. It started as a small player in digital transformation. Now it is a big name in IT services and BPO.
The company helps businesses with consulting, cloud, and engineering. It works in over 90 countries. Many Fortune 500 firms are its clients. This gives it a solid base in terms of its business prospects.
A recent report from a brokerage firm caught my eye. They were forecasting a 10% price rise, from Rs. 1510 levels, in next 8-12 months (from September 2025). The brokerage liked its strong verticals and deal wins.
But now in November’25, the price is around Rs 1,424; it has dipped by about 5% since then.
I wonder, does this price dip make it more appealing for long-term investors or not?
Let me dig deeper into this. We will look at its business, finances, and plans. Also the risks.
As an Indian investor myself, I like stocks that grow steadily. Tech Mahindra seems to fit this logic. But we need facts to decide. So let’s proceed.
About the Company
Tech Mahindra is part of the Mahindra Group. Anand Mahindra is the Chairman of Tech Mahindra (like he is for Mahindra & Mahindra).
It focuses on digital solutions. They help companies who want a modern IT infrastructure for themselves.
What they do? They build strategy, apps, cloud, and networks.
Their main focus areas are the following:
- Communications,
- Manufacturing,
- BFSI, Technology,
- Healthcare, and
- Logistics.
About 84% revenue comes from IT services. The rest ~16% from BPO.
They have over 1,100 clients. The top 10 make up 25% of sales. This mix keeps their risks low. Why? Because first, they have very large clients, and then no one client can hurt their business earnings too much.
The company is global. They are spread across America, Europe, India, and others countries. They serve big names in energy, insurance, media, and more.
Recently, they refreshed their brand on their 39th anniversary. It is all about “Scale at Speed.” Read about it here.
Sounds fancy, but it means helping firms change fast with AI and tech. I think this shows they are not stuck in old ways.
Financial Snapshot
Let us check the numbers of Tech Mahindra. In a brokerate report, they shared past and future figures.
- Sales in FY25 were Rs 52,988 crore.
- EBIT at Rs 5,111 crore.
- PAT Rs 4,244 crore.
- EPS Rs 48/share.
- They predict growth. By FY27E:
- Sales could hit Rs 61,861 crore.
- EBIT Rs 8,699 crore.
- PAT Rs 6,734 crore.
- EPS Rs 69.
Here is a quick table:
| Year | Sales (Rs Cr) | EBIT (Rs Cr) | PAT (Rs Cr) | EPS (Rs) | P/E (x) | RoE (%) | RoCE (%) | EV/EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| FY24 | 51,996 | 2,689 | 2,386 | 27 | 57 | 9 | 9 | 29 |
| FY25 | 52,988 | 5,111 | 4,244 | 48 | 32 | 16 | 15 | 19 |
| FY26E | 56,080 | 6,812 | 5,260 | 54 | 28 | 18 | 17 | 16 |
| FY27E | 61,861 | 8,699 | 6,734 | 69 | 22 | 20 | 19 | 12 |
With the above assumed number, the company’s EPS is expected to growth at a rate of 19.9% CAGR in next 2 years.
| Description | FY25 | FY27E | Period (Yrs) | Growth Rate |
| Sales | 52,988 | 61,861 | 2 | 8.05% |
| EBIT | 5,111 | 8,699 | 2 | 30.46% |
| PAT | 4,244 | 6,734 | 2 | 25.96% |
| EPS | 48 | 69 | 2 | 19.90% |
Latest Q2 FY26 results came in October. Revenue up 4.8% to Rs 13,995 crore. But net profit down 4.5% to Rs 1,195 crore. In dollars, revenue was $1,586 million. Up 1.6% QoQ.
EBIT margin at 12.1%. They declared a Rs. 15 interim dividend. Headcount is 152,714. Down a bit. Attrition is low at 12.8%.
Strategic Initiatives Driving Growth
The brokerage also highlighted investments for growth.
Like Project Fortius for cost cuts. Started in FY25. It aims for better margins. They want 15% EBIT by FY27 (up from 12.1% as of today.
Also, their focus is on key accounts and integrating acquisitions.
In Q1 FY26, TCV was $809 million. Up 51% YoY. Then in Q2, new deals at $816 million. Up 35% YoY. Big wins in communications, BFSI, and high-tech. Large deals are growing. This shows clients trust them more.
They are also pushing AI hard.
- Over 77,000 staff trained in GenAI.
- 200+ AI agents in use.
They are doing key partnerships like with:
- AMD for cloud
- Falcon for banking infra.
- Crosscall for AI mobility in North America.
These moves could boost their efficiency in times to come.
AI Innovation and Market Position
AI is the big story here.
Tech Mahindra got recognized by Gartner as an Emerging Leader in GenAI services (read here). They have reports on AI in banking, manufacturing, and retail. Like “Building the AI-Driven Bank of Tomorrow.” It talks about modernizing with AI for better customer experience.
- In telecom, AI with 6G for smarter networks.
- In engineering, AI for sustainable products.
This positions them well. I see how IT firms like this lead in global tech. But competition is also tough from Infosys and TCS.
They won Frost & Sullivan award for BPM in Asia-Pacific (read here). Shows strength in digital transformation.
Valuation and Outlook
At Rs 1,424, the stock looks cheaper than September’s Rs 1,509. Market cap around Rs 1.4 lakh crore. 52-week high was Rs 1,808, low Rs 1,209. P/E for FY26E is 28. Seems fair for a growth stock.
The outlook is stronger for H2 FY26. There will be better deals and recovery for this stock. Higher growth than peers is expected in Tech Mahindra
Here is a recent stock chart to see the trend. You can see that while the price is showing an upward trend but the P/E is colling off. This can be one sign of potential undervaluation.
I think it is attractively valued now. There is a strong upside potential if deals convert in favor of Tech Mahindra, as the management is planning.
Conclusion
Looking at Tech Mahindra’s journey, it reminds me how patience pays in the IT world.
Sure, short-term dips happen with global uncertainties. But their AI push and deal momentum suggest resilience.
For us long-term investors, it is like betting on a company that has seen all the cycles and has emerged as a winner. I believe in the long-term technology in this world. In such a situation, I personally think that at current levels, Tech Mahindra is value buy for me. What do you think?
Have a happy investing.
Thank you for your response
Thanks for sharing your analysis.
However in the Stock Engine you have recommended to Avoid investment in this stock
Please clarify
All stock analysis algorithms works on the past data. TechM is now showing almost ~3.5 years of underperformance.
In Stock Engine, I’ve coded some future possibility bias, but that’s the way it is for now.
This blog post was based on the recent commentaries of the management of TechM where they talked what can happen in TechM in times to come.
I posted this blog as I found their future guidance interesting. But yes, all of these will take time to unfold. Suitable only for people who have a huge risk appetite for short-term volatility (my guess).