Tech Mahindra stock price tanked 5.32% to Rs 1,082.30 on Thursday after the company reported a 38% fall in net profit quarter-on-quarter to Rs 692.5 crore in Q1FY24. Brokerages gave divergent calls for the stock following the first fiscal quarter results: HDFC Securities and ICICI Securities recommended ‘Reduce’ and ‘Sell’ ratings on the stock, while Elara maintained its ‘Buy’ rating. Tech Mahindra share price has fallen over 11% in the last one week, while it has gained over 10% in the past one year.
Tech Mahindra Stock Call: Should you buy, sell or hold TechM shares?
HDFC Securities Reduce – Target Price: Rs 1,020 (5.7% downside)
“We downgrade Tech Mahindra to Reduce (ADD earlier) with a target price at Rs 1,020 (14x Jun-25E EPS) as recovery in growth/margin may be protracted on sub-par bookings and near-term challenges in CME vertical may persist for longer (recent instances of deals from large customers going to competition as well as business challenges for telcos).”
Elara Securities:Buy – Target Price: Rs 1,380 (27.5% Upside)
“With the new leader, Mr. Mohit Joshi taking charge, we are optimistic on a turnaround, to which key actionable are: 1) paring sub-contracting cost to 10% of revenue from 14% currently; 2) juniorization of pyramid and 3) improving offshore revenue. We roll forward to Sep-25E EPS and retain Buy with a raised target price of Rs 1,380 from Rs 1,340, on 18.2x (from 16.2x) Sep-25E EPS, in line with a five-year average adjusted for standard deviation.”