HDFC Securities Recommends To Buy This Stock For 14.37% Return, In 6 Months

The brokerage firm has recommended buying stocks of Tech Mahindra with a potential upside of 14.37%, within a target period of 6 months (2 quarters).

Target Price

The Current Market Price (CMP) of Tech Mahindra is Rs. 1656. The brokerage firm, HDFC Securities Recommends has estimated a Target Price for the stock at Rs. 1894. Hence the stock is expected to give a 14.37% return, in a Target Period of 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 1656
Target Price	Rs. 1894
1 Year returns	14.37%

Company performance

Tech Mahindra's consolidated revenue increased by 6.7% QoQ and 16.1% YoY to Rs. 10,881 crore. Revenue in dollar terms grew by 6.4% sequentially and 16.4% YoY to US$ 1,472.6mn and the revenue growth in constant currency terms stood at 7.2% QoQ. EBIT was up by 6.9% QoQ and 24.1% YoY to Rs. 1,652 crore. Net Profit was up by 25.8% YoY to Rs. 1,339 crore. On the vertical front, the company's Communications, media, and entertainment business registered a 6.7% sequential growth in Q2FY22, manufacturing 3%, and technology at 8.4%, Banking, financial services insurance (BFSI) segment witnessed 6% QoQ growth, and retail, transport & logistics business revenue was up by 7.7% QoQ in Q2FY22.

Comments by HDFC Securities

According to HDFC Securities, "Tech Mahindra has a superior services mix and its multiple long-term contracts are spread across verticals. We see healthy traction in Communications and Enterprise verticals which will help the company in gaining strong revenue acceleration moving ahead. The company remains aggressive on delivering double-digit organic revenue growth in FY22, given broad-based demand, strong deal wins (USD3bn in LTM), improving win rates (2x growth) and steady progress on client mining."

About the company

Tech Mahindra is US$ 5.1bn the company with 121,000 professionals across 90 countries and engaged in the business of providing IT solutions to various clients. The company has established capabilities across verticals - Communication and Enterprise (Manufacturing, BFSI, Technology, Media and Entertainment (TME), Retail, transport, and logistics (RTL), healthcare etc.). The company provides technologies and solutions to more than one thousand active clients, with a ~93% repeat business in Q2FY22.

Disclaimer

The above stock was picked from the brokerage report of HDFC Securities. 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.

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