Tech Mahindra positive on improved September quarter profit; brokerages mixed - check targets

Tech Mahindra stocks: Tech Mahindra stocks traded higher on Wednesday post announcement of the September quarter results. The buying was buoyed as the second quarter net profit came higher than the Street estimates. Tech Mahindra, a Mahindra Group company and the country's fifth largest company, on Tuesday posted a 4 per cent decline in consolidated profit after tax at Rs 1,285 crore. The company's overall revenue rose 20.7 per cent to Rs 13,129 crore against Rs 10,881 crore in the same period a year ago and 3.2 per cent higher than the previous quarter of the current fiscal.

On Wednesday morning, the stock opened at Rs 1071 and made an intraday high of Rs 1098.70 on NSE, gaining around 3 per cent. At 12:30 PM, it quoted Rs 1072 apiece to trade near the previous close.

Post the announcement of Q2 earnings, brokerages have given mixed responses on the stock:

The company's operating profit margin compressed to 15.1 per cent as against 18.3 per cent in the year-ago period, denting the bottom line and resulting in the dip in profits. The Mahindra group company reported a total contract value -- the value of new deal wins -- at USD 716 million for the reporting quarter, and the management expressed satisfaction at the number saying it is within the target band of USD 700 million-USD 1 billion.

On the human resources front, Tech Mahindra in the September quarter added over 5,000 on a net basis to take its overall employee base to over 1.63 lakh people. The company gave out average hikes of 6-10 per cent to its employees during the quarter, which resulted in a 1 per cent impact on the operating profit margins.

The attrition came down to 19.6 per cent for the quarter from 21 per cent in the preceding quarter and remained at the upper edges of the budgeted levels, the company said, adding that it is on a downward slide.

Tech Mahindra Dividend 2022

The Pune-based company on Tuesday also announced a whopping 360 per cent dividend special dividend for its shareholders. The 360 per cent dividend translates into Rs 18 per equity share.

"Declared Special dividend of Rs. 18/- per equity share of Rs. 5/- each i.e. 360% of the face value," the company said in an exchange filing.

Tech Mahindra Dividend Record Date 2022

The company has also announced the record date for determining the eligibility for the payment of dividend to the shareholders. The IT major has set November 10 as the record date and November 24 as the payment date."Fixed 10th November 2022 as the Record Date for determining the members entitled to receive the Special Interim dividend," the company said.

Tech Mahindra stocks have yielded a negative return of 39 per cent to its investors in 2022 so far. The 52-week range of the stock is Rs 1,838.00 - Rs 943.70. Tech Mahindra has a market cap of Rs 1,06,000 crore as per NSE.

The stock has lost 39.74 per cent since the beginning of this year and fallen 27.6 per cent during the last one year. The IT stock hit a 52-week high of Rs 1837.75 on December 30, 2021 and a 52-week low of Rs 944.10 on June 17, 2022.

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Also read- 360% Special Dividend: Tech Mahindra share dividend 2022 announced - Check record date, ex date, payment date | Tech Mahindra Share Price NSE