CLSA has upgraded Tech Mahindra to a high conviction Outperform rating, raising its target price to ₹1,976, from the current market price of ₹1,573.80. The upgrade reflects strong confidence in the company’s adherence to its multi-year transformation plan and favorable macroeconomic tailwinds.
The brokerage noted that Tech Mahindra’s three-year turnaround strategy, announced in April 2024, has been executed effectively in FY25. The company is now firmly on track to achieve its FY27 goals, which include:
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15% EBIT margin
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30% Return on Capital Employed (ROCE)
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Revenue growth above the industry average
CLSA added that both revenue growth and cost discipline have improved operationally, reinforcing confidence in the company’s long-term performance.
The report also highlighted global developments that could further benefit Tech Mahindra and its peers. The ongoing US tariff reset, possible corporate tax cuts, deregulation, and potential interest rate reductions later in 2025 are all seen as positives for Indian IT companies, with Tech Mahindra especially well-positioned to benefit from a sector rerating.
With operational execution on track and global headwinds turning favorable, CLSA expects the stock to see meaningful upside in the coming quarters.
Disclaimer: This article is based solely on brokerage commentary and publicly available data. It does not constitute investment advice. Business Upturn and the author do not recommend buying or selling any stock mentioned.
