Brokerages bullish on Tech Mahindra a day after Q4 results announcement – Check target price here

A day after its quarter-four results were declared, Brokerage firms gave given either a Buy or Overweight call for Tech Mahindra stock. The company reported a decline in the Q4 profit by over 17 per cent on Monday. This was the fifth Indian IT company to release its earnings on Monday. 

With a price target of Rs 1150 per share, brokerage firm Sharekhan Research retained Buy on Tech Mahindra. It mentions that the company missed the revenue estimate, however, EBIT margin expansion and deal TCVs ($1bn+) remained strong.  

The company guided double-digit revenue growth and EBIT margin at over 15 per cent for FY22, says brokerage firm adding further that the IT company has a reasonable valuation. 

Citi continues to have a Buy rating on Tech Mahindra, it set a target of Rs 1100 per share. The brokerage firm said, the company disappointed on growth, while the EBIT margin came in ahead. It added, deal TCV at $1 bn+ was a good step-up as against the past few quarters. 

The management of the company indicated that Q1 should also be along similar lines while releasing its March-ended results on Monday. 

Meanwhile, JP Morgan upgraded its estimates for Tech Mahindra’s revenue by half a per cent, and margin by 50 to 65 bps for FY22 and FY23. The brokerage firm believes, there’s a potential for upward surprises on FY22 revenue & margin. The target price is set at Rs 1230 per share. 

The brokerage firm says, EPS estimate has also been raised by five per cent over FY22/23. Moreover, there’s a potential for upward surprises on FY22 revenue and margin, the firm said. 

CLSA says it has a Buy call on Tech Mahindra as risk-reward appears attractive given an inexpensive valuation. The brokerage firm points out, the company missed revenue estimates but a strong margin is a defense. 

Tech Mahindra has reported a 17.4 percent sequential decline in consolidated profit at Rs 1,081.4 crore for the quarter ended March 2021 as against Rs 1,309.8 crore in the previous quarter. 

The company announced an interim and special dividend of Rs 15 a share, which will be paid by August 11, 2021. On Tuesday’s trading session, the shares of Tech Mahindra declined by around one per cent to Rs 950 per share level.