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 3.31%.
- 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
anthropic claude-opus-4.6 2d agoTech Mahindra Ltd trades at a market cap of ₹1,51,184 Cr with a P/E of 28.8x and P/B of 5.02x. The company is virtually debt-free and offers a dividend yield of 3.34%, though its revenue growth has been subdued at a 5-year CAGR of 8% and 3-year profit CAGR of just 1%.
- Near debt-free balance sheet provides financial flexibility and resilience through economic cycles, with a negligible debt-to-equity ratio
- Dividend yield of 3.34% is among the highest in the Indian IT sector, supported by a payout ratio of 112%, signalling strong cash generation and shareholder return focus
- TTM revenue growth has accelerated to 11%, a meaningful pickup from the 3-year compounded sales CAGR of just 2%
- TTM profit growth of 17% indicates margin recovery and operational improvement compared to the 3-year compounded profit CAGR of 1%
- Last year ROE of 18% shows an improving profitability trend compared to the 3-year average of 13% and 5-year average of 16%
- 10-year stock CAGR of 13% demonstrates the company has delivered reasonable long-term wealth creation for patient investors
- 10-year compounded sales CAGR of 8% reflects a steady, if unspectacular, top-line scaling over a full business cycle
- P/E of 28.8x is elevated relative to the company's 5-year compounded profit CAGR of just 2%, implying the market is pricing in a turnaround that is yet to be consistently delivered
- 5-year compounded sales growth of only 8% (and just 2% over 3 years) lags several mid- and large-cap IT peers, pointing to structural share-loss or execution challenges
- 3-year compounded profit CAGR of 1% suggests that recent TTM improvement has not yet proven sustainable over a multi-year horizon
- 3-year average ROE of 13% is below the 15%+ threshold typically expected from capital-light IT services businesses
- P/B ratio of 5.02x is high for a company whose ROE has only recently recovered to 18%, leaving limited margin of safety if profitability dips again
- 1-year and 5-year stock CAGRs of 0% and 1% respectively indicate prolonged periods of negligible shareholder returns despite broader market gains
- Dividend payout ratio of 112% exceeds net profits, which may not be sustainable long-term and could constrain reinvestment in growth initiatives
- 52-week high and low data are unavailable (reported as 0), limiting visibility into recent price volatility and trading range context
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 2h ago- Five-session losing streak Sep 8
Stock trading at ₹1,559.1, down 0.31% marking fifth consecutive decline. Trading volume of 6.68 lakh shares well below the 21.86 lakh daily average, suggesting weak conviction.
- Broad IT sector weakness Sep 8
Nifty IT index down 5.14% over the past month, trading at 29,995.2. Multiple IT peers including Sonata Software (-1.83%), Hexaware (-1.66%) and TCS/Wipro/Infosys all trading lower.
- Elevated valuation multiple Sep 8
PE ratio stands at 38.3x on trailing twelve months earnings ending June 2026, leaving limited margin of safety if earnings disappoint.
- Employee dispute draws attention Aug 26
Software engineer R Bhavana staged a hunger strike outside Tech Mahindra's Hyderabad facility alleging unfair termination, filed a police complaint, and drew solidarity protests. Company disputes the claim, saying she remains an active employee with 27 working days of leave taken since joining on Mar 26.
- Outperforming sector over 1Y Sep 8
Stock gained 4.06% over the past year versus a 14.9% fall in the Nifty IT index and a 4.88% decline in NIFTY, showing relative resilience.
- Futures signal mild optimism Sep 8
September futures trading at ₹1,565.4, a slight premium to the ₹1,559.1 spot price, indicating derivatives market participants are positioning for potential recovery.
- ServiceNow AI partnership expanded Aug 20
Tech Mahindra expanded its multi-year partnership with ServiceNow to move enterprises from AI pilots to production-scale deployment, acting as delivery partner for ready-to-use enterprise AI solutions.
- Active investor engagement schedule Sep 7
Company scheduled investor interactions at the UBS India Summit (Sep 11, Mumbai), BofA India IT Call Series (Sep 1, virtual), and Goldman Sachs Asia Leaders Conference (Aug 31, Hong Kong).
TL;DR: Tech Mahindra is in a short-term rough patch with five straight sessions of decline amid broad IT sector weakness, but its 1-year relative outperformance (+4.06% vs Nifty IT's -14.9%) and expanded ServiceNow AI partnership show the turnaround story remains intact. The 38.3x PE and sector-wide headwinds are near-term risks. Active investor engagement across UBS, BofA, and Goldman Sachs events through September could serve as catalysts if management delivers a confident outlook on deal pipeline and AI-led growth.
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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57 extracted metrics + investor summaries across FY15–FY27.
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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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