Tech Mahindra share price touches new 52-week high, rises over 4%; here's why

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Nifty 50 index's top contributor. According to technical analysts, the stock has already given a multi-month breakout and today there is a strong price traction. In the near term analysts expect information technology (IT) pack to finally come of slumber phase and show strong outperformance, where Tech Mahindra shares is likely to lead from the front.

The immediate support for the stock is ₹1,150, in the near term analysts expect the stock to trade in the range of ₹1330 - 1350. Tech Mahindra shares opened at an intraday low of ₹1180.55 and recorded a 52-week high at ₹1,226.15 apiece on BSE. According to Vinit Bolinjkar, Head of Research, Ventura Securities, Tech Mahindra’s unique product mix and valuation discount with Tata Consultancy Services (TCS) and Infosys has rallied the stock.

Tech Mahindra is a globally recognised company that specialises in telecommunication systems and software. Despite the challenges faced by the entire IT sector as a result of the weakened global economy, Tech Mahindra stands resilient due to its substantial presence in the media and telecom industry, which accounts for 40% of its revenue. This advantageous position shields Tech Mahindra from the headwinds experienced by the IT sector, thanks to the increasing investments being made by both developed and developing countries in 5G telecommunication infrastructure.

Further, the company has taken proactive measures to establish itself as a leader in 5G technology, assembling a dedicated team to spearhead its efforts. As a testament to its success, Tech Mahindra's revenue from 5G-related initiatives surpassed USD 1.0 billion in FY23. "Moreover, Tech Mahindra currently trades at a favourable FY25 P/E of 17.5X, which represents a 23% discount