Axis Capital has increased its target price on the shares of Tech Mahindra after the IT services firm reported a near 30% rise in net profit in the September quarter, as compared to the same period a year ago.
Axis Capital has increased its target price on the shares of Tech Mahindra after the IT services firm reported a near 30% rise in net profit in the September quarter, as compared to the same period a year ago. India’s fifth largest IT firm Tech Mahindra on Wednesday reported a 29.7% rise in consolidated net profit to Rs 836.15 crore for the quarter ended 30 September. This is against a net profit of Rs 644.73 crore in the July-September 2016 quarter, according to the company’s statement. The company’s revenue from operations was rose by more than 6.% to Rs 7,606.38 crore during the quarter as compared to Rs 7,167.41 crore in the same quarter, last fiscal.
Axis Capital has increased the target price on the shares to Rs 550, from the previous target of Rs 476.2. Tech Mahindra shares were trading at Rs 479.5, down by nearly 2% since the previous close. The research firm’s target price implies an upside of more than 15% from the current market prices. While the shares have given negative returns of 0.08% in the year so far, the Sensex is up by more than 26% in the year. Notably, the shares have risen by 21% in the last three months.
“Tech Mahindra has once again proved that despite the occasional headwinds, geopolitical uncertainties and changing demands, we will rise to grow,” Tech Mahindra Vice-Chairman, Vineet Nayyar told yesterday. Axis Capital says that the financial performance has bottomed out in Q4 FY-17. Further, the research firm says that EBITDA margin will improve to mid-teen levels in Q4 FY-19.