Clear Signals of Profit and Growth by FY27, Strong Demand Seen from Banking to Healthcare Sectors, According to Recent Brokerage House Report
Tech Mahindra, a leading IT industry company, is once again in the news. Mirae Asset Sharekhan recently released a fresh report on the company, presenting a very positive outlook on its future. According to the report, the company is rapidly progressing towards its FY27 targets, and its performance is expected to strengthen in the coming years. Therefore, the brokerage has maintained its 'BUY' rating on the stock and set a target price of Rs 1950.
Currently, the company's shares are trading in the market at around Rs 1705. This implies a potential upside of approximately 14 percent from the current price. According to the brokerage house, this estimate is based on the company's business foundation, new projects, and strategies.
Growth Seen in Profits and Valuation
Tech Mahindra's shares are currently trading at a price-to-earnings ratio of 27.5x and 22.7x, respectively, based on the estimated profits for FY26 and FY27. This indicates that investors may receive good returns in the coming time. The company has taken concrete steps in recent times to streamline its business operations, which will reduce its costs and improve profit margins.
Strength to Come from Banking and Healthcare Sectors
The report also states that Tech Mahindra is receiving consistent and stable demand from sectors like banking, financial services, retail, and healthcare. The need for digital transformation is increasing in these areas, which is directly benefiting IT companies. Tech Mahindra has prepared special solutions for these sectors that are helping to strengthen its client base.
Growth to be Supported by Europe and Asia-Pacific
Tech Mahindra is also benefiting from geographical diversification. Client demand is showing stability, especially in regions like Europe and Asia-Pacific (APJ). The company has a b presence in these markets and a regular order flow from there.
According to the report, stability is also beginning to emerge in the telecom vertical, which will further strengthen the company. This vertical has been a traditional strength of Tech Mahindra, and the increase in spending in this sector can benefit it well in the long term.
Expected Orders of $600–800 Million Every Quarter
The company's management estimates that it will continue to receive new orders worth around $600 to $800 million every quarter. If this figure is maintained, Tech Mahindra will achieve steady and rapid growth in the next two years.
This order inflow will not only strengthen the company's revenue line but will also help it achieve its targets. The company is continuously adding new clients and acquiring new deals in areas such as digital, cloud, and network transformation.
Project Fortius is a Game Changer
Tech Mahindra has launched a new internal program called ‘Project Fortius’. Under this project, the company is focused on increasing operational efficiency, reducing costs, and improving delivery.
Under this initiative, Tech Mahindra is working towards earning more profits from fixed-price deals. Along with this, better coordination is being created between onsite and offshore workforces, the project portfolio is being simplified, and the pricing strategy is being strengthened.
According to the report, the impact of this project will be seen in the coming quarters and will accelerate the company's overall growth. There is a possibility of improvement in both margins and customer satisfaction.
Market Focus on the Company's Strategy
The share price of Tech Mahindra has been stable for some time, but the strategy and projects set for FY27 have once again instilled confidence in investors. The company has immersed itself in technology transformation, which includes areas such as artificial intelligence, machine learning, 5G, and network automation.
Along with this, the company is also continuously strengthening its team and structure to increase its deal-winning capabilities. Serious work is also being done on new business models and pricing strategies.
Positive Outlook in the IT Sector
The brokerage report also states that the demand for the IT sector is still present. Especially in India, the government's focus on digital infrastructure is increasing, which will create possibilities for companies to get projects.
Tech Mahindra's portfolio and strategy place it in a different position compared to other IT companies. This is the reason why the brokerage house has maintained a ‘BUY’ rating on the stock and indicated a 14 percent upside.
