Shares of Tech Mahindra fell after the opening bell on Thursday, April 23 after brokerages shared their outlook on the company's in-line quarterly results. Tech Mahindra shares dropped nearly 3% intraday to Rs 1,418 apiece. The scrip was trading 2.37% lower by 10:08 a.m. The benchmark NSE Nifty 50 was down 0.3%.
The IT firm announced in-line fourth quarter results on Wednesday, April 22, reporting a sequential increase in both revenue and profit, while its bottom line fell short of market expectations. On a quarter‑on‑quarter basis, Tech Mahindra posted consolidated revenue of Rs 15,076 crore, up from Rs 14,393 crore in the previous quarter and more than the Bloomberg estimate of Rs 14,784 crore.
Net profit rose to Rs 1,354 crore from Rs 1,122 crore in the prior quarter, reflecting improved operational performance, but missed Bloomberg's estimate of Rs 1,511 crore, indicating continued pressure on margins despite the earnings growth.
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Jefferies' maintained an Underperform rating and raised its target price to Rs 1,225 from Rs 1,180, citing in-line revenues, while profit missed estimates due to forex losses. In contrast, Citi maintained a Sell rating at a target price of Rs 1,275, highlighting primarily inline fourth quarter results, while flagging tough industry environment.
Citi on Tech Mahindra
- Citi maintained 'Sell' rating with target price of Rs 1275
- Q4FY26 results was largely inline
- Tech Mahindra has been executing reasonably well in a tough industry environment
- Valuations price in the positives
Jefferies on Tech Mahindra
- Jefefries maintained 'Underperform'; and hiked target price to Rs 1225 from Rs 1180.
- The company reported in-line revenues; but profit missed estimates due to forex losses
- The brokerage raised earnings per share by 2-3% on rupee depreciation
- Strong deal wins, improving outlook for communications vertical and improving margins will support 3.6%/13% CAGRs in revenues and earnings per share over FY26-29
- TechMahindra's 16% premium to Infosys limits upsides.
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