Tech Mahindra (TECHM IN) – Q1FY27 Result Update – Growth Momentum Sustains; FY27 Outlook Remains Strong – BUY
Published on 17 Jul 2026
Management reiterated confidence in achieving revenue growth above peer’s average in FY27E, supported by a healthy order book and timely ramp ups. Q2 is likely to have an incremental headwind from normalization of the accelerated Europe automotive program, the headwind is likely to get compensated against a large deal (Comms) ramp up and overcoming Q1 seasonality. On margins, Project Fortius, operating leverage and other margins kickers are expected to more than offset continued investments in AI capabilities and talent, hence the management remains confident of achieving ~15% EBIT margin in FY27E. Driven by the stronger-than-expected execution, improving growth visibility and robust deal momentum, we revise our FY27E/FY28E CC revenue growth estimates to 6.0%/5.4% (from 4.8%/5.8%) while increasing our EBIT margin estimates to 14.8%/15.1% (from 14.5%/15.0%), resulting in an EPS upgrade of ~2.2% for both FY27E and FY28E. We assign 20x (earlier 19x) to arrive at a TP of INR 1,780 (INR 1,660). Retain BUY.
