Tech Mahindra's Q1 FY26 revenue missed estimates due to continued weakness in manufacturing and client specific issue in Hi-tech. However, the communications segment, which was a key overhang, is now net positive and should support revenue momentum going forward.
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Motilal Oswal Report
We remain positive about the restructuring at Tech Mahindra Ltd. under the new leadership. But we expect the impact from these steps to be visible gradually.
With the communications vertical turning net positive, continued strength in banking, financial services and insurance, and improving operational efficiency, we see room for continued margin improvement ahead.
We value Tech Mahindra at 25 times FY27E earnings per share with a target price of Rs 2,000 (24% upside).
We reiterate our Buy rating on the stock.
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