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Tech Mahindra Shares: Shares of Tech Mahindra Ltd. slipped on Tuesday, June 23, after global brokerage Citi reiterated its cautious stance on the IT services major. The brokerage maintained a ‘Sell’ rating on the stock and assigned a target price of ₹1,275 per share, implying a potential downside of around 11% from the previous closing level.
At around 12:45 PM, Tech Mahindra shares were trading 1.8% lower at ₹1,409 per share, extending the stock’s decline for the year. The stock has fallen 12.4% in 2025 so far.
🚨 Why Is Citi Bearish on Tech Mahindra?
According to Citi, Tech Mahindra’s management continues to project better-than-industry growth and aims to achieve an EBIT margin of 15% by FY27. However, the brokerage remains skeptical about the company’s ability to deliver sustained outperformance amid a challenging demand environment.
Citi highlighted that growth trends across the IT sector remain under pressure, with clients continuing to exercise caution on technology spending.
The brokerage also noted that Tech Mahindra is currently trading at a premium valuation compared to several large-cap IT peers, making strong execution over the next two years critical for future gains.
“Strong FY27 execution will be key for further outperformance,” Citi said.
📊 Tech Mahindra Q4 Results Beat Estimates on Revenue
Tech Mahindra’s March quarter (Q4FY25) earnings were broadly in line with, and in some areas slightly ahead of, market expectations.
Key Highlights from Q4FY25 Results
✅ US Dollar Revenue:
Revenue rose 0.9% sequentially to $1.625 billion, marginally above Street estimates of $1.624 billion.
✅ Revenue in Rupee Terms:
The company reported revenue of ₹15,076 crore, surpassing analyst expectations of ₹14,804 crore and marking a 4.7% quarter-on-quarter increase.
✅ Constant Currency Growth:
Growth stood at 0.6% sequentially, in line with market estimates of 0.5%.
✅ EBIT Performance:
EBIT came in at ₹2,084 crore, slightly above expectations of ₹2,035 crore.
✅ Margin Expansion:
EBIT margin improved to 13.8%, compared to 13% in the previous quarter, reflecting operational efficiency improvements.
👨💼 Analyst Ratings on Tech Mahindra Stock
Despite Citi’s cautious outlook, the broader analyst community remains largely optimistic on Tech Mahindra.
Out of 45 analysts covering the stock:
- 🟢 30 analysts recommend ‘Buy’
- 🟡 6 analysts recommend ‘Hold’
- 🔴 9 analysts recommend ‘Sell’
The analyst distribution indicates that while concerns remain regarding industry-wide growth challenges, many experts continue to see long-term value in Tech Mahindra’s transformation strategy and margin improvement initiatives.
🔍 Tech Mahindra Share Price Outlook
Investors will closely monitor Tech Mahindra’s progress toward achieving its 15% EBIT margin target by FY27, along with revenue growth trends in key markets such as North America and Europe.
While recent earnings showed signs of operational improvement, brokerages like Citi believe that sustained execution and stronger demand recovery will be necessary to justify the stock’s premium valuation.
Key Takeaways
📌 Citi maintains a ‘Sell’ rating on Tech Mahindra with a target price of ₹1,275.
📌 The brokerage sees an 11% downside risk from current levels.
📌 Management remains confident of achieving a 15% EBIT margin by FY27.
📌 Q4 earnings were largely in line with expectations, with revenue and margins showing improvement.
📌 Strong execution over the next two years will be crucial for future stock performance.
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