HSBC has reaffirmed its ‘Buy’ rating on Tech Mahindra with a target price of ₹1,900, saying that the company’s Q1FY26 performance remains aligned with its longer-term FY27 strategic roadmap.
The company reported Q1 EBIT margin of 11.1%, up 60 bps QoQ, and a solid $809 million in new deal wins. Despite a marginal decline in revenue and profit, HSBC notes that TechM is executing steadily toward its FY27 objectives, which include improved growth and profitability benchmarks.
Management continues to expect growth in FY27 to outpace that of peers, which HSBC believes supports a positive re-rating over time. However, the brokerage also flagged the delay in margin expansion as a key downside risk to its thesis. Attrition rose to 12.6% from 11.8% QoQ, which may lead to higher replacement and training costs.
Overall, HSBC sees Tech Mahindra as well positioned, supported by its efforts in enterprise transformation, cloud, and next-gen services. The company’s execution on deal ramp-ups and cost discipline in the coming quarters will be critical.
