Tech Mahindra surges by more than 12%
Tech Mahindra, the fifth-largest IT company in India based on market capitalization, witnessed a significant surge of more than 12% during today’s intraday trading, reaching Rs 1347 per share. This notable increase reflects the market’s optimistic response and underscores the confidence in the company’s ambitious future strategies.
The surge occurred despite Tech Mahindra’s modest financial performance reported for Q4 FY24 and the entire fiscal year FY24. After-market hours on Thursday, the company’s financial results failed to meet street expectations.
During Q4 FY24, its consolidated net profit experienced a significant drop of almost 41% to Rs 661 crore, while revenue decreased by 6.2% year-on-year to Rs 12,871 crore.
In the entirety of FY24, the company registered a year-on-year decrease in consolidated net profit of 51.2%, amounting to Rs 2,358 crore, while revenue stood at Rs 51,996 crore, marking a 2.4% decrease compared to the previous fiscal year.
Motilal Oswal, a domestic brokerage firm, has conveyed a positive outlook on the restructuring endeavors undertaken by Tech Mahindra under its new leadership. The brokerage holds an optimistic view on recent initiatives, such as right-sizing of Strategic Business Units (SBUs), investments in key accounts, formation of vertical delivery teams, and commitments towards employee development.
In a recent analysis, JM Financials delved into Tech Mahindra’s management presentation of a three-year turnaround plan. The plan’s objectives encompass surpassing peer-average growth, reaching a 15% EBIT margin, and sustaining a Return on Capital Employed (ROCE) of over 30% by FY27.
