Tech Mahindra Limited: Comprehensive Stock Analysis Report | Scrolls
- Editor
- Sep 16
- 2 min read
by KarNivesh | 16 September, 2025
Tech Mahindra Limited: Short Overview
Tech Mahindra Limited, a leading Indian IT services firm, is currently undergoing a significant transformation to enhance operational efficiency and reposition itself strategically in the fast-changing global technology landscape. With a market capitalization of ₹1,49,448 crores (as of September 2025), the company has displayed resilience despite sector-wide challenges. Its EBIT margins expanded by 360 basis points in FY2025, marking seven consecutive quarters of margin improvement. Net income surged 34% in the latest quarter, though revenue growth remained modest at 2.7% year-over-year. Despite these improvements, the stock delivered a negative return of 7.4% over the past year, reflecting investor caution.
Founded in 1986 as a joint venture between Mahindra & Mahindra and British Telecom, Tech Mahindra has grown into a global technology consulting and digital solutions provider, serving 1,100+ clients across 90 countries. Under the leadership of CEO Mohit Joshi since 2024, the company has focused on cost optimization and innovation in areas such as AI and 5G. Initiatives like Project Indus 2.0, an AI model for Hindi and its dialects powered by NVIDIA, highlight its ambition to build sovereign AI solutions for India.
In FY2025, Tech Mahindra reported revenue of ₹52,988 crores, up 1.9% year-over-year, and profit after tax of ₹4,252 crores, up 80.3%. The most recent quarter (Q1 FY2026) posted revenue of ₹13,351 crores and net profit of ₹1,141 crores. ROE stood at 15.6%, below the industry average, while ROCE was 20.4%. Debt remains negligible with a debt-to-equity ratio of 0.02, indicating financial prudence.
The company’s stock trades at a relatively high valuation with a PE ratio of 32.9x versus the industry average of 25.9x and a price-to-book ratio of 5.1x. Despite this, its profitability trails peers like TCS and Infosys, which enjoy net margins above 17%, compared to Tech Mahindra’s 8.0%. By market capitalization, Tech Mahindra ranks sixth among major Indian IT companies, behind TCS (₹11.3 lakh crores), Infosys (₹6.3 lakh crores), HCL, and Wipro.
Promoters hold 35% of shares, while institutional investors collectively hold nearly 40% (FIIs at 23.28% and domestic mutual funds at 16.51%). This reflects strong professional investor confidence in its turnaround potential.
Revenue diversification spans Communications & Media (35%), BFSI (25%), Manufacturing (18%), Healthcare (12%), and Retail & CPG (7%). Its global presence provides growth opportunities but also exposes it to currency fluctuations and regulatory challenges.
Looking forward, India’s IT sector is projected to grow at a 13.4% CAGR, reaching ₹13.8 lakh crores (approx. $166.4 billion) by 2030. Tech Mahindra aims to capture this growth through investments, including a ₹700 crore commitment to expand its product and platform vertical, targeting revenue of about ₹8,300 crores ($1 billion). Strategic partnerships, such as with NVIDIA and USI, strengthen its position in AI, 5G, and edge computing.
Key risks include heavy reliance on telecom clients, competition from larger peers, talent retention challenges, currency fluctuations, and its premium valuation. However, with deal wins up 44% over the past year and a sharper focus on AI-driven transformation, Tech Mahindra is positioning itself as a turnaround story with long-term growth potential.
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