TECHM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.9

Here’s a detailed breakdown of Tech Mahindra (TECHM) based on its financials, valuation, and business fundamentals

📊 Core Financials

Revenue & Profitability

Quarterly PAT: ₹1,129 Cr (slightly down from ₹1,142 Cr)

EPS: ₹46.4 — solid earnings base

ROE: 14.6%, ROCE: 18.6% — healthy return metrics

Qtr Profit Variation: 32.6% — strong YoY growth

Margins & Efficiency

Operating and net profit margins are stable, though not industry-leading

Dividend Yield: 3.10% — attractive for income-focused investors

Debt & Liquidity

Debt-to-equity: 0.07 — virtually debt-free

Strong cash flows and balance sheet stability

💰 Valuation Metrics

Metric Value Interpretation

P/E Ratio 31.6 Slightly above industry average (29.1)

P/B Ratio ~5.2 Indicates premium valuation

PEG Ratio -2.93 Negative due to earnings slowdown

Intrinsic Value Below CMP Stock appears overvalued currently

🧠 Business Model & Competitive Edge

Core Business: IT services, consulting, and digital transformation across global markets

Segments: IT and BPS (Business Process Services)

Strengths

Global footprint with diversified revenue streams

Strategic focus on AI, cloud, and automation

Challenges

Margin pressure from global IT spending slowdown

Recent earnings miss and RSI of 24.4 suggest bearish sentiment

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📉 Technical & Sentiment Indicators

RSI: 24.4 — oversold zone, potential for rebound

MACD: -43.2 — bearish momentum

Volume below average — low trading interest currently

DMA 50 & 200: CMP is below both — short-term weakness

🎯 Entry Zone & Long-Term View

Suggested Entry Zone: ₹1,250–₹1,300 (near 52-week low and oversold RSI)

Long-Term Holding: Suitable for patient investors seeking dividend yield and gradual growth. Monitor quarterly performance and margin recovery.

Would you like a comparison with peers like Infosys or Wipro to see how TECHM stacks up?

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stockanalysis.com

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www.topstockresearch.com

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