Tech Mahindra Limited

TECHM.BO•information-technology-services

Current Price

1,497.65INR

per share

Fair Value

845.37INR

Overvalued

77.2%

Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 8.01%, lower than industry average of 9.16%.

Growth Trajectory

Profitability

In the growth phase company makes 11.70% profit on every dollar of sales, higher than industry average of 7.18%.

Profitability Trajectory

Risk Profile

Investors expect at least 10.88% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)

Return on Invested Capital (%)

Financial Health Overview

Enterprise Value

698.90B INR

Equity Value

747.94B INR

FCF Yield

46.88%

Average ROIC

24.11%

Cost of Capital

10.15%

P/E Ratio

27.65x

Financial Metric	Most Recent 12 months (INR)	Previous Year (INR)
Revenues	533.34B INR	519.96B INR
Operating Income or EBIT	64.74B INR	43.47B INR
Interest Expense	3.28B INR	3.92B INR
Book Value Of Equity	273.62B INR	266.69B INR
Book Value Of Debt	20.25B INR	25.37B INR
Cash and Marketable Securities	74.07B INR	73.58B INR
Number of Shares Outstanding	884.76M	--
Minority interests	4.77B INR	0 INR
Current Stock Price	1497.65 INR	--
Effective Tax Rate	26.00%	--
Marginal Tax Rate	30.00%	--

Performance vs Industry

Revenue Growth

-6.58%

2.57%Company

9.15%Industry

Below Industry

Operating Margin

+4.96%

12.13%Company

7.17%Industry

Above Industry

Tech Mahindra Limited demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate

4.65%

Cost of Capital

8.88%

Return on Capital

8.88%

Reinvestment Rate

52.36%

Terminal value represents 53% of total enterprise value, based on 4.65% perpetual growth and 8.88% discount rate.

Equity Value Breakdown

Component	Value	Type
Present Value (Terminal Value)	368.43B INR	Add
Present Value (Cash Flow Over Next 10 Years)	330.47B INR	Add
Value of Operating Assets	698.90B INR	Sub-total
Debt	20.25B INR	Subtract
Minority Interests	4.77B INR	Subtract
Cash	74.06B INR	Add
Value of Equity	747.94B INR	Sub-total
Number of Shares	884.76M shares	Divisor
Estimated Value per Share (Fair Value)	845.36 INR	Total
Current Market Price	1.49K INR	Reference

Financial Projections

Total FCF Present Value

330.47B INR

Avg Revenue Growth

6.16%

Avg Operating Margin

11.60%

Avg ROIC

24.11%

Year	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal Year
REVENUE
Revenue	572.43B INR	618.26B INR	667.76B INR	721.23B INR	778.97B INR	836.11B INR	891.83B INR	945.28B INR	995.58B INR	1.04T INR	1.09T INR
Growth Rate	7.33%	8.00%	8.00%	8.00%	8.00%	7.33%	6.66%	5.99%	5.32%	4.65%	4.65%
PROFITABILITY
Operating Income	69.48B INR	73.23B INR	78.12B INR	83.31B INR	88.84B INR	95.35B INR	101.71B INR	107.80B INR	113.54B INR	118.82B INR	124.35B INR
Operating Margin	12.13%	11.84%	11.69%	11.55%	11.40%	11.40%	11.40%	11.40%	11.40%	11.40%	11.40%
EBIT (1-tax)	51.42B INR	54.19B INR	57.80B INR	61.65B INR	65.74B INR	69.80B INR	73.64B INR	77.19B INR	80.39B INR	83.17B INR	87.04B INR
CASH FLOW
Reinvestment	7.18B INR	7.76B INR	8.38B INR	9.05B INR	8.96B INR	11.81B INR	11.33B INR	10.67B INR	9.82B INR	10.27B INR	45.58B INR
Free Cash Flow	44.23B INR	46.43B INR	49.42B INR	52.59B INR	56.78B INR	57.98B INR	62.30B INR	66.52B INR	70.57B INR	72.90B INR	41.46B INR
Terminal Value	--	--	--	--	--	--	--	--	--	--	980.25B INR
Present Value	39.89B INR	37.76B INR	36.25B INR	34.79B INR	33.87B INR	31.30B INR	30.56B INR	29.74B INR	28.87B INR	27.40B INR	—
EFFICIENCY
ROIC	23.39%	23.87%	24.62%	25.35%	26.06%	26.72%	26.97%	27.15%	27.25%	27.28%	8.88%
Cost of Capital	10.88%	10.88%	10.88%	10.88%	10.88%	10.48%	10.08%	9.68%	9.28%	8.88%	8.88%
Sales/Capital	6.37x	6.37x	6.37x	6.37x	6.37x	4.71x	4.71x	4.71x	4.71x	4.71x	—

Profitability & Efficiency

Operating Margin (%)

ROIC (%)

Value Creation Analysis

ROIC (%)

Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow (₹B)

Reinvestment (₹B)