Jefferies has maintained an ‘underperform’ (U-p) rating on Tech Mahindra, citing missed estimates for its 3Q results due to FX headwinds. However, the company surprised positively with 60bps quarter-on-quarter (QoQ) margin expansion and healthy order wins.
The brokerage noted that utilization levels are near their peak, and subcontracting costs have reached decade-low levels. Jefferies projects 15% margins by FY27 and a 26% EPS compound annual growth rate (CAGR) over FY25-27. However, it warned that sensitivity to margin assumptions may limit the stock’s potential for re-rating.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
