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Tech Mahindra Ltd

NSE: TECHM BSE: 532755

1619.90

(-1.60)%

Sat, 07 Feb 2026, 08:54 am

Analysis

dividend

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Pros

  • Dividends per share have increased over the past 10 years.
  • Dividends paid are well covered by earnings (3.1x coverage).
  • Dividends after 3 years are expected to be well covered by earnings (2.4x coverage).
  • Tech Mahindra's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
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Cons

  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).
  • Tech Mahindra's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

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Pros

  • Tech Mahindra's earnings growth is expected to exceed the low risk savings rate of 7.2%.
  • Tech Mahindra's earnings are expected to increase by more than the low risk growth rate in 3 years time.
  • Performance (ROE) is expected to be above the current IN IT industry average.
  • An improvement in Tech Mahindra's performance (ROE) is expected over the next 3 years.
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Cons

  • Cash flow for Tech Mahindra is expected to increase but not above the 50% threshold in 2 years time.
  • Tech Mahindra's earnings are expected to grow by 7.4% yearly, however this is not considered high growth (20% yearly).
  • Tech Mahindra's earnings growth is positive but not above the India market average.
  • Tech Mahindra's earnings are expected to decrease over the next year.
  • Tech Mahindra's net income is expected to increase but not above the 50% threshold in 2 years time.
  • Tech Mahindra is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
  • Tech Mahindra's revenue is expected to increase but not above the 50% threshold in 2 years time.
  • Tech Mahindra's revenue is expected to grow by 5.6% yearly, however this is not considered high growth (20% yearly).
  • Tech Mahindra's revenue growth is positive but not above the India market average.

health

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Pros

  • Tech Mahindra is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Tech Mahindra is profitable, therefore cash runway is not a concern.
  • Tech Mahindra is profitable, therefore cash runway is not a concern.
  • Debt is well covered by operating cash flow (179.5%, greater than 20% of total debt).
  • Debt is covered by short term assets, assets are 9.5x debt.
  • Tech Mahindra's cash and other short term assets cover its long term commitments.
  • Tech Mahindra earns more interest than it pays, coverage of interest payments is not a concern.
  • Tech Mahindra's level of debt (10.9%) compared to net worth is satisfactory (less than 40%).
  • Low level of unsold assets.
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Cons

  • The level of debt compared to net worth has increased over the past 5 years (5.4% vs 10.9% today).

management

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Pros

  • The tenure for the Tech Mahindra board of directors is about average.
  • CP's compensation has been consistent with company performance over the past year, both up more than 20%.
  • The tenure for the Tech Mahindra management team is about average.
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Cons

  • CP's remuneration is higher than average for companies of similar size in India.
  • Tech Mahindra individual insiders have only sold shares in the past 3 months.

misc

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Pros

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    Cons

    • Tech Mahindra has significant price volatility in the past 3 months.

    past

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    Pros

    • Tech Mahindra's year on year earnings growth rate has been positive over the past 5 years.
    • Tech Mahindra used its assets more efficiently than the IN IT industry average last year based on Return on Assets.
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    Cons

    • Tech Mahindra's 1-year earnings growth is negative, it can't be compared to the 5-year average.
    • Tech Mahindra's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
    • Tech Mahindra has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
    • Tech Mahindra's 1-year earnings growth is negative, it can't be compared to the IN IT industry average.

    value

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    Pros

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      Cons

      • Tech Mahindra's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
      • Tech Mahindra's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
      • Tech Mahindra is overvalued based on assets compared to the IN IT industry average.
      • Tech Mahindra is poor value based on expected growth next year.
      • Tech Mahindra is overvalued based on earnings compared to the IN IT industry average.
      • Tech Mahindra is overvalued based on earnings compared to the India market.
      • TECHM underperformed the IT industry which returned -10.1% over the past year.
      • TECHM underperformed the Market in India which returned -14.5% over the past year.
      • NSEI:TECHM is up 4.5% underperforming the IT industry which returned 8.5% over the past month.
      • NSEI:TECHM is up 4.5% underperforming the market in India which returned 8% over the past month.

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