Tech Mahindra share price cracks over 6% after Q3 result; what should you do?
₹1,349.65 against the previous close of ₹1,407.75 and soon fell over 6 per cent to hit the level of ₹1,322. Around 9:20 am, the stock traded 5.53 per cent lower at ₹1,329.95. Tech Mahindra Q3 results: After market hours on Wednesday, Tech Mahindra reported a 61 per cent year-on-year (YoY) decline in its net profits which plunged to ₹510.4 crore in the December 2023 quarter from ₹1,296.6 crore in the year-ago period.
The revenue from operations of the company came down 4 per cent YoY from ₹13,734.6 crore in Q3FY23 to ₹13,101.3 crore during the period under review. The earnings before interest, taxes, depreciation, and amortization (EBITDA) of Tech Mahindra plunged 46.5 per cent year-on-year to ₹1,146 crores. Also Read: Tech Mahindra Q3 Results: Net profit falls 61% YoY to ₹510.4 crore, revenue at ₹13,101 crore Most brokerage firms retained their earlier view on the stock after the IT firm's Q3 numbers.
They do not appear upbeat about the stock for the short term. Nuvama Wealth Management has maintained a 'reduce' call on the stock and trimmed the target price to ₹1,020 from ₹1,050 earlier. "Tech Mahindra’s weak bookings dwarf the bottoming out of its revenue decline and the potential uptick in margins in the near future.
Investors eagerly await the new CEO's future strategy, to be unveiled in April 2024. We are cutting FY24E, FY25E and FY26E EPS (earnings per share) by 8.5 per cent, 6.9 per cent, and 1.4 per cent, respectively, on lower growth and margins," Nuvama said. "While we remain optimistic about the new CEO, we believe he has a tall ask ahead of him to resurrect Tech Mahindra’s performance on growth and margins.
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