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Motilal Oswal Report
Domestic brokerage firm Motilal Oswal Financial Services has reiterated a ‘Buy’ rating on Tech Mahindra Ltd., highlighting a bottom-up turnaround story backed by improving demand visibility, stabilising telecom vertical and margin expansion initiatives.
The brokerage has set a target price of Rs 1,750, implying an upside potential of around 24% from current levels.
The brokerage said it remains constructive and bullish on Tech Mahindra’s transformation under new leadership, with early signs of recovery already visible across key business segments. It noted that the company’s strategic plan for FY27 remains on track, with improved execution expected to drive gradual earnings recovery.
A key trigger for the turnaround is the recovery in the telecom vertical, which has historically been a drag on growth. Motilal Oswal highlighted that two large deals in this segment are currently ramping up in phases and are likely to transition the vertical from a multi-year headwind to a neutral-to-positive contributor going forward.
Overall, the brokerage reiterated that Tech Mahindra is a compelling turnaround play in the IT services space, supported by improving fundamentals, strategic execution and sector recovery tailwinds.
It values the stock at 20x FY28E EPS, maintaining its bullish stance on the company’s medium-term outlook.
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