Tech Mahindra Gets 'Reduce' From ICICI Securities Post Q1 Results With 7% Potential Downside

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ICICI Securities Report

Tech Mahindra Ltd. reported largely in-line revenue growth and a slight beat on margins. Highlights:

1. Growth bouncing back in the telecom vertical.

2. Good margin execution.

3. Strong total contract value at $809 million, up 51% YoY.

But the company saw softness in BFSI, which is critical to its turnaround journey and sounded cautious in manufacturing and technology demand. FY26 is supposed to be the year to bridge the growth gap with peers.

Over the past four quarters, TCV has been between $600– 800 million, but QoQ constant currency growth has been between -1.5% to 1% CC, indicating slow revenue conversion.

Given the slow start to the year, we have built in a modest 2.2% USD FY26 revenue growth- better than Tech Mahindra’s FY25 growth but lower than our expectation for peers.

Maintain Reduce with a one-year forward target price of Rs 1,490 on an unchanged target PE of 19 times.

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