Anand Rathi Suggests Buying This Tech Stock For An Aggressive 43% Upside In 1 Year, Pat Improves 39.2% YoY

Brokerage firm Anand Rathi has recently recommended investors to buy the stocks of Tech Mahindra. Tech Mahindra has reported a PAT of Rs. 15,057 million, a growth of 39.2% YoY with a net margin of 12.4% in the last quarter.

Target Price, Current Market Price, and Market-Cap

The Current Market Price (CMP) of Tech Mahindra Ltd. (TECHM) is Rs. 1146. Anand Rathi has estimated a Target Price for the stock at Rs. 1650. Stock is anticipated to give a 43% return, in 1 year. This is a large-cap company with a market capitalization of Rs. 111,596 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 1146
Target Price	Rs. 1650
Potential 1 year return	43.00%
52 week high share price	Rs. 1,838.00
52 week low share price	Rs. 1,007.00

The company has achieved a strong broad-based growth across the industries it is operational in.

Company performance: Tech Mahindra

The brokerage firm has informed that Tech Mahindra has reported good revenue growth in the last quarter. Revenue from operations has improved by 24.5% YoY to Rs. 121,163 million on consolidated basis. In constant currency (CC) terms the revenue grew by 24.5% YoY. The company reported healthy revenue growth led by better performance across all regions - Americas, Europe & RoW. Communication Media and Entertainment (CME), Manufacturing, Technology, BFSI, Retail and others grew YoY by 21.7%, 9.5%, 32.4%, 28.1%, 18.6% & 17.3% respectively in constant currency. The EBITDA from operations for the quarter has improved by 10.1% YoY at Rs. 20,884 million with a margin of 17.2%. The company's EPS is Rs. 16.94 per share.

Tech Mahindra is a US$ 6 billion organization with 151,100+ professionals across 90 countries. They are focused on leveraging next-generation technologies including 5G, Blockchain, Quantum Computing, Cybersecurity, Artificial Intelligence, and more, to enable end-to-end digital transformation for global customers.

What does Anand Rathi think?

In Q4 FY22 Tech Mahindra has achieved net new large deals of $1.0 billion. Both the Communication Media and Entertainment (CME) & Enterprise business verticals of the company have been the backbone of the company. These two segments have witnessed growth consistently over the last few quarters by winning large deals including significant wins in the 5G space, digital transformation, and adoption of the cloud.

"The company has been making investments in its digital engineering capabilities and is now in a good position to provide engineering capabilities in the Metaverse ecosystem, from network to devices to applications and use cases, or for that matter, offering software product development and capabilities therein. The company continues to get positive demand across sectors, however, it is facing higher employee attrition and margin pressure due to higher expenses," brokerage firm Anand Rathi said.

Disclaimer

The above stock was picked from the brokerage report of Anand Rathi. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.