Tech Mahindra
Tech Mahindra
Information Technology F&OKey Fundamentals
LargecapComputer Software & ConsultingInformation TechnologyTapetide Score
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Key Insights
Strengths
3- Company is almost debt free.
- Stock is providing a good dividend yield of 3.33%.
- Company has been maintaining a healthy dividend payout of 112%
Weaknesses
2- The company has delivered a poor sales growth of 8.46% over past five years.
- Company has a low return on equity of 13.3% over last 3 years.
Growth Rate
AI Analysis — Bull vs Bear
Tech Mahindra has a market capitalisation of about ₹1,50,370 crore and trades at a P/E of 29.4x and a P/B of 5.11x. Over the trailing twelve months, sales grew 11% and profit grew 17%, and last year's ROE was 18%. Over the longer term the record is weaker: 3-year sales CAGR is 2%, 3-year profit CAGR is 1%, 3-year average ROE is 13%, and the stock's 5-year CAGR is 1%.
- Growth has picked up recently. TTM profit growth of 17% and TTM sales growth of 11% are well above the 3-year CAGRs of 1% and 2%, which points to an earnings recovery.
- Last year's ROE was 18%, up from a 3-year average of 13%. That is back in line with the 10-year average of 17%, which suggests capital efficiency is returning to its historical level.
- The dividend yield of 3.31% is high for a large-cap Indian IT company and gives shareholders a meaningful cash return.
- The dividend payout ratio is about 112%, which shows management is committed to returning cash to shareholders.
- The company is almost debt free. That limits balance sheet risk and leaves room for investment or acquisitions.
- Over 10 years, the stock has compounded at 13% a year, sales at 8% and profit at 5%. With a market cap of about ₹1,50,370 crore, the business has sustained scale over the long run.
- The stock has returned 10% over the past year, compared with a 3-year CAGR of 6% and a 5-year CAGR of 1%. The improvement in fundamentals may be starting to show in the share price.
- The P/E of 29.4x is demanding for a company whose profit grew at a 1% CAGR over 3 years and a 2% CAGR over 5 years. The valuation assumes the recent recovery will last.
- Profit has grown only 5% a year over 10 years, which lags sales growth of 8% over the same period. That points to long-term margin erosion.
- Sales grew at a 2% CAGR over 3 years and 8.46% over 5 years. This is a weak top-line record in a sector where peers have often grown faster.
- The 3-year average ROE of 13% is low for an asset-light IT services business, and it has fallen from the 10-year average of 17%.
- The stock's 5-year CAGR of 1% and 3-year CAGR of 6% mean long-term shareholders have seen little capital appreciation.
- A dividend payout of about 112% is more than earnings. It may not be sustainable unless profits keep growing, and it leaves little earnings to reinvest.
- The P/B of 5.11x combined with a 3-year average ROE of 13% implies a rich price relative to book value if returns fall back to recent averages.
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
- Fifth straight session of losses Sep 8
The stock fell 0.31% to ₹1,559.1 on the NSE as of 13:19 IST, its fifth losing session in a row. Volume was 6.68 lakh shares, well below the one-month daily average of 21.86 lakh.
- Sector-wide IT selloff Sep 8
IT stocks were among the weakest in early trade, and Tech Mahindra fell as much as 0.98%. The Nifty IT index has lost 5.14% over the past month and 14.9% over the past year, while the NIFTY slipped 0.52% to 23,655.6.
- Rich valuation at 38.3x PE Sep 8
Tech Mahindra trades at a trailing P/E of 38.3, based on twelve-month earnings ending June 26. That multiple leaves little room for error if the sector stays weak.
- Board to weigh bonus issue Oct 1
The board will consider a proposal to issue bonus shares out of accumulated reserves, at no cost to shareholders. Markets often read this as a sign of confidence in reserves, though the proposal isn't approved yet.
- SBI MF crosses 5% stake Sep 19
SBI Mutual Fund bought 2,54,865 shares on September 17, 2026, lifting its holding to 5.0134%. It disclosed the move under SEBI SAST Regulation 29(1), which points to growing institutional interest.
- Outperforming IT peers over year Sep 8
The stock is up 4.06% over the past year, while the NIFTY fell 4.88% and the Nifty IT index fell 14.9%. September futures at ₹1,565.4 trade at a small premium to spot.
- Busy investor conference schedule Sep 17
Management lined up investor meetings at the UBS India Summit (Sep 11), the Anand Rathi and J.P. Morgan conferences in Mumbai (Sep 21-22) and a virtual Kotak Fireside Chat (Sep 23, 2:00 pm IST). The company said no unpublished price-sensitive information would be shared.
TL;DR: Tech Mahindra has held up well against a weak IT sector, gaining 4.06% over the past year while the Nifty IT index fell 14.9%. SBI MF lifting its stake above 5% and a possible bonus issue add support. Near-term momentum is weak, though, with five straight losing sessions to ₹1,559.1, thin volumes and a rich 38.3x P/E, all while the sector is under pressure. The board's bonus decision and the upcoming quarterly results will likely decide whether the stock's lead over peers holds or fades with the sector.
Quarterly Results
| Particulars | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 13,159 | 12,864 | 13,101 | 12,871 | 13,006 | 13,313 | 13,286 | 13,384 | 13,351 | 13,995 | 14,393 | 15,076 | 15,712 |
| Expenses | 11,821 | 11,950 | 11,955 | 11,772 | 11,441 | 11,563 | 11,477 | 11,545 | 11,416 | 11,830 | 12,028 | 12,511 | 12,974 |
| Operating Profit | 1,338 | 914 | 1,146 | 1,099 | 1,564 | 1,750 | 1,809 | 1,839 | 1,935 | 2,165 | 2,366 | 2,565 | 2,738 |
| OPM % | 10% | 7% | 9% | 9% | 12% | 13% | 14% | 14% | 14% | 15% | 16% | 17% | 17% |
| Other Income | 200 | 264 | 92 | 380 | 147 | 522 | 23 | 173 | 219 | 40 | -293 | -205 | -106 |
| Interest | 120 | 98 | 116 | 58 | 72 | 89 | 76 | 85 | 78 | 77 | 94 | 89 | 111 |
| Depreciation | 447 | 466 | 443 | 461 | 462 | 470 | 459 | 462 | 458 | 469 | 474 | 481 | 479 |
| PBT | 971 | 615 | 679 | 959 | 1,178 | 1,714 | 1,297 | 1,464 | 1,618 | 1,659 | 1,505 | 1,791 | 2,042 |
| Tax % | 28% | 18% | 23% | 31% | 27% | 27% | 24% | 22% | 30% | 28% | 26% | 24% | 27% |
| Net Profit | 704 | 505 | 524 | 664 | 865 | 1,258 | 989 | 1,142 | 1,129 | 1,202 | 1,119 | 1,356 | 1,486 |
| EPS in Rs | 7.1 | 5.06 | 5.23 | 6.77 | 8.71 | 12.78 | 10.05 | 11.92 | 11.65 | 12.19 | 11.45 | 13.82 | 14.95 |
Profit & Loss
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 22,621 | 26,494 | 29,141 | 30,773 | 34,742 | 36,868 | 37,855 | 44,646 | 53,290 | 51,996 | 52,988 | 56,815 | 59,176 |
| Expenses | 18,428 | 22,234 | 24,956 | 26,063 | 28,471 | 31,365 | 31,059 | 36,626 | 45,527 | 47,489 | 46,024 | 47,783 | 49,342 |
| Operating Profit | 4,193 | 4,260 | 4,184 | 4,710 | 6,271 | 5,503 | 6,796 | 8,020 | 7,763 | 4,506 | 6,964 | 9,033 | 9,834 |
| OPM % | 19% | 16% | 14% | 15% | 18% | 15% | 18% | 18% | 15% | 9% | 13% | 16% | 17% |
| Other Income | 106 | 453 | 775 | 1,417 | 534 | 1,192 | 788 | 1,115 | 965 | 927 | 864 | -240 | -564 |
| Interest | 69 | 97 | 129 | 162 | 133 | 192 | 174 | 163 | 326 | 392 | 322 | 337 | 371 |
| Depreciation | 611 | 759 | 978 | 1,085 | 1,129 | 1,446 | 1,458 | 1,520 | 1,957 | 1,817 | 1,853 | 1,882 | 1,902 |
| PBT | 3,618 | 3,857 | 3,853 | 4,879 | 5,543 | 5,058 | 5,953 | 7,452 | 6,446 | 3,224 | 5,653 | 6,573 | 6,997 |
| Tax % | 27% | 22% | 26% | 22% | 23% | 23% | 27% | 24% | 25% | 26% | 25% | 27% | — |
| Net Profit | 2,659 | 3,027 | 2,851 | 3,786 | 4,289 | 3,897 | 4,353 | 5,630 | 4,857 | 2,397 | 4,253 | 4,806 | 5,163 |
| EPS in Rs | 27.35 | 30.92 | 28.88 | 38.78 | 43.7 | 41.76 | 45.73 | 57.27 | 49.6 | 24.14 | 43.43 | 49.1 | 52.41 |
| Div. Payout % | 22% | 35% | 28% | 33% | 29% | 32% | 89% | 47% | 91% | 150% | 94% | 94% | — |
Balance Sheet
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 480 | 436 | 439 | 442 | 444 | 436 | 437 | 439 | 440 | 441 | 442 | 443 |
| Reserves | 11,768 | 14,155 | 15,998 | 18,401 | 19,841 | 21,377 | 24,428 | 26,447 | 27,484 | 26,228 | 26,919 | 29,173 |
| Borrowings | 700 | 1,091 | 1,366 | 2,397 | 1,996 | 3,670 | 2,901 | 2,618 | 2,740 | 2,537 | 2,025 | 2,186 |
| Other Liabilities | 6,899 | 6,843 | 8,254 | 9,192 | 11,166 | 11,834 | 11,836 | 14,911 | 15,162 | 13,943 | 14,880 | 17,366 |
| Total Liabilities | 19,848 | 22,525 | 26,057 | 30,431 | 33,446 | 37,318 | 39,602 | 44,416 | 45,827 | 43,149 | 44,267 | 49,168 |
| Fixed Assets | 4,033 | 4,309 | 6,460 | 7,622 | 7,061 | 8,872 | 9,018 | 14,784 | 14,932 | 13,903 | 13,982 | 14,864 |
| CWIP | 568 | 629 | 373 | 240 | 276 | 50 | 118 | 165 | 120 | 133 | 21 | 27 |
| Investments | 2,103 | 1,297 | 2,396 | 4,841 | 7,342 | 5,848 | 10,238 | 4,884 | 3,388 | 3,238 | 3,182 | 3,426 |
| Other Assets | 13,145 | 16,289 | 16,828 | 17,728 | 18,766 | 22,548 | 20,228 | 24,583 | 27,388 | 25,875 | 27,082 | 30,851 |
| Total Assets | 19,848 | 22,525 | 26,057 | 30,431 | 33,446 | 37,318 | 39,602 | 44,416 | 45,827 | 43,149 | 44,267 | 49,168 |
Cash Flow
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating | 2,448 | 3,137 | 4,071 | 3,554 | 4,432 | 4,358 | 8,094 | 5,285 | 5,572 | 6,376 | 5,786 | 6,172 |
| Investing | -1,865 | -1,453 | -2,893 | -3,319 | -2,104 | 1,081 | -5,433 | 480 | -226 | -1,318 | -15 | -314 |
| Financing | -829 | -496 | -1,571 | -269 | -2,251 | -4,466 | -2,987 | -4,667 | -5,078 | -4,767 | -5,799 | -5,130 |
| Net Cash Flow | -246 | 1,188 | -392 | -35 | 77 | 974 | -326 | 1,098 | 267 | 291 | -29 | 728 |
| Free Cash Flow | 1,335 | 2,266 | 3,311 | 2,763 | 3,653 | 3,529 | 7,521 | 4,450 | 4,603 | 5,639 | 5,303 | 5,626 |
| CFO/OP | 84 | 105 | 123 | 108 | 97 | 107 | 140 | 95 | 97 | 169 | 104 | 87 |
Ratios
| Particulars | Mar 2015 | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 84 | 80 | 67 | 77 | 73 | 75 | 62 | 98 | 88 | 80 | 80 | 86 |
| Cash Conversion Cycle | 84 | 80 | 67 | 77 | 73 | 75 | 62 | 98 | 88 | 80 | 80 | 86 |
| Working Capital Days | 54 | 58 | 57 | 42 | 24 | 35 | 24 | 29 | 28 | 23 | 25 | 30 |
| ROCE % | 32% | 27% | 23% | 24% | 25% | 22% | 23% | 26% | 22% | 12% | 19% | 23% |
Insights
BetaAI-extracted from concalls & annual reports · figures as reported, with sources
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67 extracted metrics + investor summaries across FY11–FY27.
Documents
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Company Information
Tech Mahindra Ltd provides comprehensive range of IT services, including IT enabled service, application development and maintenance, consulting and enterprise business solutions, etc. to a diversified base of corporate customers in a wide range of industries.[1]
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