Gladiator Stocks - Tech Mahindra - ICICI Direct

Technical View

• The IT sector is staging a notable pullback after base formation near 52-week EMA and remains a key outperformer amid recent market volatility. Since 2008, the index has held this key long term average on multiple occasions except 2016 and 2020. Within large cap IT space Tech Mahindra remains in a structural uptrend and provides a favourable risk-reward entry at the current juncture
• The stock has rebounded after forming a base around the major support area of Rs. 1330-1360 levels as it is the confluence of the rising 52 weeks EMA (currently at Rs. 1356) and October 2021 lows around Rs. 1360, indicating inherent strength that augurs wells for resumption of structural uptrend
• The weekly RSI is at the cusp of generating a buy signal thus validates positive bias

Fundamental View

• Tech Mahindra (TechM) has over 1.2 lakh employees across 90 countries serving 1000+ clients with higher exposure to Telecom (40% of revenues). Apart from telecom the company caters to BFSI, manufacturing & retail. TechM has grown organically and inorganically (dollar revenue CAGR of 5.6% over past five years)
• The company indicated that communication will continue to be the growth driver for TechM, going ahead. The growth in communications would be primarily driven by 5G related spending by operators. The company also said communication vertical growth would be driven by i) infrastructure ii) customer enhancement iii) network modernisation iv) software transformation
• BFSI has top three out of 10 clients of overall TechM portfolio. The company indicated that replacing core banking solutions and upgrading them is the key growth opportunity. The vertical is currently around US$800mn and management indicated that it is trending to reach US$1 billion revenue in FY22 and US$1.5 billion in two to three years

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Link to the report

Shares of Tech Mahindra Limited was last trading in BSE at Rs. 1503.00 as compared to the previous close of Rs. 1486.95. The total number of shares traded during the day was 148075 in over 5452 trades.

The stock hit an intraday high of Rs. 1508.60 and intraday low of 1485.85. The net turnover during the day was Rs. 222420212.00.

Source : Equity Bulls

Keywords

TechMahindra INE669C01036 GladiatorStocks ICICIDirect