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Tech Mahindra retracts from six year high on profit booking

Since November 7, the stock has rallied nearly 11% compared to less than 1% rise in benchmark and IT sector index.

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SI Reporter Mumbai
Last Updated : Nov 20 2013 | 2:48 PM IST
Shares of Tech Mahindra have dipped 3% to Rs 1,690, falling 4% from its intra-day high, on profit booking on the National Stock Exchange (NSE).

The stock opened at Rs 1,751 and hit high of Rs 1,763, a fresh over six year high on NSE.  A combined 1.25 million shares have changed hands on the counter till 1440 hours on BSE and NSE.

Tech Mahindra has outperformed the market by surging nearly 11% after announcements of July-September (Q2FY14) earnings on November 7 till yesterday, as against less than 1% rise in CNX Nifty and CNX IT sector index.

IT consulting and software firm had reported 4.7% quarter-on-quarter (qoq) growth in the dollar revenues to US$ 758 million for Q2. Analyst expected revenue to drop around 3% for the quarter.

The Management indicated that the company remains confident of growth from the non-BT business with it continuing to see a robust deal pipeline across geographies.

Most of the analysts have recommended ‘Buy’ on the stock with target price in the range of Rs 1,750 to Rs 1,840.

“Q2FY14 was an encouraging indicator of Tech Mahindra’s improving prowess in winning deals to hive off any impacts from a weak BT account in particular, and Telecom in general,” says analyst at Motilal Oswal Securities in a note. Analyst revised target price of the stock to Rs 1,840.

Analyst at broking firm Edelweiss Securities continues to prefer Tech Mahindra for its robust execution and the improving demand outlook.  He has a ‘Buy’ rating on the stock with revised target price of Rs 1,819.
 

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First Published: Nov 20 2013 | 2:42 PM IST

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