Tech Mahindra shares zoom 10% as strong FY27 vision overshadows weak Q4 numbers
Tech Mahindra today hit the 10% upper circuit limit at Rs 1,242.4 on BSE despite reporting a 41% year-on-year (YoY) drop in its March quarter profit as investors appreciated new CEO Mohit Joshi's FY27 strategy to take the company ahead of peers' average growth and to a 15% EBIT margin.
While the restructuring efforts are in the right direction and the FY27 strategy is in place, investors will await the results on account of these efforts before the stock gets rerated.
Jefferies has maintained an underperform call on the stock saying that weak order booking & headcount declines point to a weak growth outlook. HSBC has also maintained a hold call saying that a new turnaround plan looks sensible for the company, adding that execution remains challenging, especially in the current environment.
JPMorgan has also maintained an underperform rating on Tech Mahindra but raised the target price to Rs 1100 from Rs 1050 earlier.
Also Read | Tech Mahindra Q4 Results: PAT plunges 41% YoY to Rs 661 cr; Rs 28/share dividend declared
«The road to recovery is very long. The management commentary was good enough to keep the narrative going for TechM's turnaround story. Targets are well meaning but too far out in the future to adhere to in a business that feels like a quarterly/monthly treadmill,» it said.
Jefferies has reduced its target price on Tech Mahindra to Rs 1,065 and UBS has reduced it to Rs 1,200.
After announcing Q4 numbers, Tech Mahindra MD and CEO Mohit Joshi unveiled his 'Vision 2027' strategy, conveying 4 key
