Tech Mahindra Limited (NSE:TECHM) Analysts Are Pretty Bullish On The Stock After Recent Results

It's been a good week for Tech Mahindra Limited (NSE:TECHM) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.3% to ₹1,541. Revenues of ₹130b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹9.60, missing estimates by 2.7%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Tech Mahindra

Following the latest results, Tech Mahindra's 42 analysts are now forecasting revenues of ₹532.8b in 2025. This would be a credible 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 63% to ₹46.53. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹532.5b and earnings per share (EPS) of ₹46.68 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 6.8% to ₹1,433despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Tech Mahindra's earnings by assigning a price premium. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Tech Mahindra at ₹1,810 per share, while the most bearish prices it at ₹950. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tech Mahindra's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Tech Mahindra's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.7% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Tech Mahindra.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Tech Mahindra going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Tech Mahindra that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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