Tech Mahindra Faces Stock Decline Post Q3 Earnings

Tech Mahindra Faces Stock Decline Post Q3 Earnings

VoM News Desk | January 25, 2024 | 04:45 PM IST | Breaking News | Follow on Google News

Tech Mahindra Faces Stock Decline Post Q3 Earnings/Pixabay

Tech Mahindra Faces Stock Decline Post Q3 Earnings

Shares of Tech Mahindra saw a nearly 7% intraday decline on Thursday following the release of the company’s December quarter results. The stock opened at ₹1,349.65, falling nearly 7% to ₹1,312.50 before closing 6.12% lower at ₹1,321.60.

Tech Mahindra Q3 Performance

After market hours on Wednesday, Tech Mahindra reported a 61% YoY decline in net profits, amounting to ₹510.4 crore in Q3 2023 compared to ₹1,296.6 crore in the same period the previous year. The revenue from operations also decreased 4% YoY, dropping from ₹13,734.6 crore in Q3FY23 to ₹13,101.3 crore in the latest quarter. EBITDA experienced a 46.5% YoY decline, reaching ₹1,146 crore.

Market Reaction and Analyst Views

In response to the Q3 results, Tech Mahindra’s share price faced a negative market sentiment. Brokerage firms maintained cautious views, with Nuvama Wealth Management retaining a ‘reduce’ call and lowering the target price to ₹1,020 from ₹1,050. The firm expressed concerns about weak bookings and emphasized the need for the new CEO’s strategy, expected in April 2024.

Motilal Oswal Financial Services retained a neutral stance on the stock, setting a target price of ₹1,360. Despite acknowledging the weak Q3 performance, the brokerage firm highlighted the potential opportunity in Tech Mahindra’s high exposure to the communications vertical amid the broader 5G rollout.

Analysts Emphasize Caution Despite Future Opportunities

While analysts recognize the potential opportunities in Tech Mahindra’s business verticals, concerns persist about the company’s near-term growth and margin uncertainties. Nuvama Wealth Management remains cautious about the stock’s performance relative to peers, emphasizing the time required for the new CEO’s strategy to impact earnings.

Investors are advised to exercise caution, with market experts awaiting clearer indications of Tech Mahindra’s growth trajectory and margin stability.

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.