Tech Mahindra Ltd. share price target

Given the uncertainty from the world's largest economies, we expect delays in decision-making on IT budgets. Keeping this in view, we recommend a SELL on the stocks.

Tech Mahindra (TechM) has reported slightly better-than-estimated revenue performance with 0.8% QoQ CC decline, led by traction in BFSI vertical in Q4FY24. It reported TCV growth of 31% QoQ with EBIT margin at 7.4%.

Recommendation: Given the uncertainty from the world's largest economies, we expect delays in decision-making on IT budgets. Keeping this in view, we recommend a SELL on the stock.

We recently upgraded TechM to BUY from Sell (read our report here link). With that, we now delve into and address key ensuing concerns flagged by investors, essentially: 1) Why do we expect margins to revive from Q1FY25 revenue growth from FY26; 2) What are TechM’s capabilities in BFSI? and what opportunities can it tap into to scale up in this vertical?; 3) What is recently appointed COO Atul Soneja’s track record.

Given the uncertainty from the world's largest economies, we expect delays in decision-making on IT budgets. Keeping this in view, we recommend a SELL on the stock.