Tech Mahindra’s FY27 margin aspiration of 15% now appears achievable, supported by structural initiatives under Project Fortius— focused on pyramid optimization, pricing improvement, automation, and utilization of T&M resources. Cost levers include an improved offshore mix, subcontractor rationalization, and selling, general and administrative efficiency. These gains are expected to offset investments in GenAI, talent upskilling, and wage hikes.
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Motilal Oswal Report
We remain positive about the restructuring at Tech Mahindra Ltd. under the new leadership and believe this quarter was another step in the right direction. But we expect the impact from these steps to be visible gradually.
We believe its bottom-up transformation appears relatively independent of discretionary spending. With the potential for telecom recovery and improved operational efficiency, we see room for sustained margin improvement going forward.
We value Tech Mahindra at 25x FY27E EPS with a target price of Rs 1,950 (35% upside). We reiterate our Buy rating on the stock.
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