Shares of Tech Mahindra Ltd fell nearly 0.6% in early trade on Friday to ₹1,436.80, despite the company posting a 77% year-on-year (YoY) jump in consolidated net profit for Q4FY25 to ₹1,167 crore, up from ₹661 crore in the year-ago period. The decline came as investors digested a mixed earnings report and some profit-booking pressure.
The Mahindra Group IT company also saw a 19% sequential rise in net profit, compared to ₹983.2 crore in the previous quarter. However, consolidated revenue from operations grew modestly, up 4% YoY to ₹13,384 crore, and just 1% quarter-on-quarter.
What’s driving the earnings?
The strong profit surge was largely attributed to lower subcontracting expenses and a deferred tax gain. CEO Mohit Joshi noted that the company had laid a solid foundation during FY25 through strategic investments in people, leadership, and capabilities.
Deal wins stood at $2.7 billion, marking a 42% YoY increase, and the company declared a final dividend of ₹30 per share for FY25.
Market reaction and outlook
Despite the earnings beat on profit, the stock has slipped as of April 25, likely due to lukewarm revenue growth and cautious investor sentiment.
As per the latest data:
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Market Cap: ₹1.39 trillion
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P/E Ratio: 33.63
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Dividend Yield: 3.03%
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52-week range: ₹1,172.80 – ₹1,807.70
Should you buy, sell or hold?
Jefferies has given an ‘Underperform’ rating on the stock with a target price of ₹1,260, noting that while margins and profit beat estimates, revenue missed expectations. The firm cited strong deal wins supporting FY26 growth but said the goal of a 530 bps margin expansion by FY27 seems ambitious. At 27x FY26 PE, Jefferies believes the stock is fully valued, especially given it trades at a 20% premium to Infosys.
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