Re-rating potential in Tech Mahindra as growth outlook improves

Rising focus on network upgradation and spending on 5G equipment by telecom industry augurs well

As growth prospects of the IT sector improve, the stock of Tech Mahindra (TechM) has seen strong investor support in recent times. 

With about 10 per cent rise over the last month, the TechM stock has been amongst the top gainers in the Nifty IT index, which is up just 0.4 per cent during this period.

An improved outlook with expectations of increase in spending in the telecommunication (telecom) space, including on 5G and other telecom infrastructure, is reviving investors’ interest in the stock, as around 40 per cent of TechM’s revenue comes from the telecom segment.

“Increasing need for rapid access to