Tech Mahindra Q3 Review — Disciplined Execution Continues, Says Motilal Oswal Yet Maintains 'Neutral' Stance

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Motilal Oswal Report

Tech Mahindra Ltd. reported Q3 FY25 revenue of $1.5 billion, up 1.2% QoQ in constant currency versus our estimate of flat CC growth. Healthcare/banking, financial services and insurance led the growth (+4.5%/2.7% QoQ CC), while communications and technology were muted on CC basis.

Ebit margin was up 60bp QoQ at 10.2%, beating our estimate of 9.7%. Adjusted PAT stood at Rs 9.8 billion (down 21.4% QoQ but up 36.8% YoY), in line with our estimate of Rs 10 billion.

For 9MFY25, revenue/Ebit/PAT grew 1.2%/24.2%/16.3% versus 9MFY24. We expect revenue/Ebit to grow by 5.2%/35.9%, but PAT to decline by 4.7% YoY in Q4 FY25.

Net new deal total contract value was $745 million, up 23% QoQ/95% YoY. We value Tech Mahindra at 25 times FY27E EPS with a target price of Rs 1,850 (11% upside). We reiterate our Neutral rating on the stock.

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