Tech Mahindra Share: Goldman Sachs and Others Set New Stock Targets After Q4 Results

Synopsis: The large-cap stock is in focus as brokerages remain mixed on Tech Mahindra following its Q4FY26 results. Citi and Goldman Sachs maintain Sell ratings, citing limited upside due to current valuations, while Jefferies keeps an Underperform stance despite margin expansion. Nuvama is optimistic with a Buy rating, highlighting strong deal wins, improving margins, and others.

The shares of a Large-Cap company specialising in digital transformation, business re-engineering, and IT consulting, focusing heavily on AI, cloud services, and 5G network technology, are in focus following Citi, Goldman Sachs, Jefferies and others’ outlook on their Q4 results.

With a market capitalization of Rs. 1,40,460.24 crores in the day’s trade, the shares of Tech Mahindra Ltd rose upto 0.6 percent, making a high of Rs. 1471.65 per share compared to its previous closing price of Rs. 1462.85 per share.

What Happened

Tech Mahindra Ltd, engaged in digital transformation, business re-engineering, and IT consulting, focusing heavily on AI, cloud services, and 5G network technology, is in the spotlight following their Q4 results and Brokerage views  as follows:

Its Revenue from operations rose by 12.6 percent YoY from Rs. 13,384 Crores in Q4FY25 to Rs. 15,076 Crores in Q4FY26, and it rose by 4.7 percent QoQ from Rs. 14,393 Crores in Q3FY26 to Rs. 15,076 Crores in Q4FY26.

Its Net Profit YoY rose by 18.7 percent from Rs. 1,142 Crores in Q4FY25 to Rs. 1,356 Crores in Q4FY26, and on a QoQ basis, it rose by 21.7 percent from Rs. 1,119 Crores in Q3FY26 to Rs. 1,356 Crores in Q4FY26. 

The earnings per share (EPS) for the quarterly period stood at Rs. 15.27, compared to Rs. 13.17 in the previous year’s quarter. The board has also recommended a Final Dividend of Rs. 36/- per equity share of the face value of Rs. 5/- each (720%) for the financial year ended 31st March 2026.

The Total Dividend for FY 2025-26, subject to approval of the Final Dividend, will be Rs. 51/- per equity share on face value of Rs. 5/- each, i.e. 1020%. The Record Date for entitlement of Final Dividend, if approved by the shareholders, is Friday, 3rd July, 2026.

Management views on the Result

Tech Mahindra’s CEO highlighted a steady and consistent performance since the beginning of the year, driven by a strong pipeline of deals that boosts confidence in future growth. The company has also raised its margin target for FY27 to 15%, signalling optimism about profitability and operational efficiency.

The CEO expressed confidence in growing faster than the industry average, with the IT sector expected to expand between 2-4% according to recent analyst estimates. A higher proportion of revenue is coming from Europe and from higher-margin services, which supports both growth and profitability.

Regarding contract renewals, the CEO noted that deflationary pressures are not new in the IT industry, as customers consistently seek improved productivity and efficiency with each renewal. This underscores Tech Mahindra’s focus on delivering value and maintaining long-term client relationships.

Brokerage views on results

Citi on Tech Mahindra

Citi has maintained a Sell rating on Tech Mahindra, with a target price of Rs 1,275. The company’s Q4FY26 results were largely in line with expectations, reflecting stable execution despite a challenging industry environment.

Tech Mahindra has delivered steady performance despite a tough industry backdrop. However, Citi observes that the stock’s current valuations already incorporate these positives, suggesting that the potential for further upside is limited for investors at present.

Jefferies on Tech Mahindra

Jefferies has maintained an Underperform rating on Tech Mahindra while raising the target price to Rs 1,225 from Rs 1,180. Q4 results showed in-line revenues, but profits missed estimates due to forex losses, partially offset by a 2–3% EPS upgrade from INR depreciation.

The company’s strong deal wins, improving communications vertical, and margin expansion are expected to support 3.6%/13% CAGRs in constant currency revenues and EPS over FY26-29. However, Tech Mahindra’s 16% premium to Infosys limits further upside potential.

Goldman Sachs

Goldman Sachs has maintained a Sell rating on Tech Mahindra, raising the target price to Rs. 1,410 from Rs. 1,340. Q4 performance was in line, with stable growth, supported by strong deal wins and continued margin improvement.

FY27 revenue for Tech Mahindra is projected to grow 3.9%, reflecting steady business momentum. However, the stock remains expensive compared to peers, trading at around 18x FY27E P/E, which limits upside potential despite ongoing operational improvements and a gradual turnaround.

Nuvama on Tech Mahindra

NUVAMA has maintained a Buy rating on Tech Mahindra with a target price of Rs. 1,750. Q4FY26 revenues grew 0.6% QoQ in constant currency, surpassing estimates of flat growth, while YoY revenue rose 2.4% CC, signalling a gradual recovery in demand.

EBIT margins improved to 13.8%, up 70bps QoQ, ahead of expectations, supported by strong deal wins with TCV of $1,073mn, up 34% YoY. Broad-based growth was led by Manufacturing at 11.8% YoY, with Telecom and BFSI steady and Hi-tech recovering in H2 FY26.

Total FY26 deal wins reached $3.8bn, up 42% YoY. Continued investments in AI, LLMs, and platforms are expected to drive future growth, with a strong deal pipeline supporting an expected earnings CAGR of 23% over the next two years.

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