CLSA has reiterated its high-conviction ‘Outperform’ rating on Tech Mahindra, maintaining a target price of ₹2,020, citing improving operating metrics and robust deal wins as signs of an impending turnaround.
Tech Mahindra’s Q1FY26 performance was broadly in line with CLSA’s expectations at the EBIT level. While revenue declined 0.25% QoQ to ₹13,351 crore, a slight miss, the company delivered a strong 7.2% sequential jump in EBIT to ₹1,477 crore. Operating margins improved to 11.1% from 10.5% in Q4, marking a key step toward recovery.
The brokerage highlighted that the company’s order booking remained strong, with deal wins coming in at $809 million, slightly above the $798 million in the previous quarter. CLSA pointed out that this continued momentum provides comfort around the company’s ability to return to growth in FY26.
The firm also endorsed Tech Mahindra’s renewed focus on three strategic pillars: mining top accounts, adding new “must-have” enterprise clients (especially Fortune 500/G2000 names), and chasing large, profitable deals.
CLSA believes that with the ramp-up of recently won large deals, Tech Mahindra is poised to begin a new phase of growth from Q2FY26, which will help deliver better top-line performance through the rest of the fiscal. It expects FY26 revenue growth to surpass FY25, signaling the end of the company’s repair phase.
