The company’s net profit tanked nearly 41 per cent YoY to Rs 661 crore in Q4FY24.
After the Q4 results, several brokerage firms have assigned a ‘buy’ rating on the Tech Mahindra stock from the earlier ‘hold’ and ‘sell’ recommendations.
Brokerage firms are bullish on Tech Mahindra’s stock and have upgraded their ratings for the shares after the company released its results for the fourth quarter of FY24. Following strong Q4 results, the IT services arm of the Mahindra Group has received the highest number of upgrades among all the stock listed on the NIFTY50 index.
Post the January-March quarter results, the number of ‘buy’ recommendations for Tech Mahindra stock has risen from 14 to 21. Brokerages have reduced their ‘hold’ and ‘sell’ ratings for the stock to 10 and 14, respectively. The change in ratings is a sign of brokerages being bullish on the stock, suggesting potential upside for further earnings.
In Friday’s session, Tech Mahindra’s stock closed at Rs 1,249.65 apiece, down 1.36 per cent, on the BSE.
The brokerage firms have turned bullish and see an upside to the Tech Mahindra stock after the company shared its turn-around plan in the next three financial years despite reporting a decline in net profit and revenue from operations.
The IT services company recently released its quarterly results along with a strategic three-year plan aimed at achieving over 15 per cent growth in operating profit and increased revenues by 2026-27. The plan emphasises bolstering customer accounts, implementing restructuring measures, and making new investments. Market experts have shown strong approval for this strategy. Tech Mahindra stock has traded northward by 20.25 per cent in one year.
Brokerage firm Morgan Stanley has upgraded its rating for the stock from ‘Underweight’ to ‘Overweight’ after the company posted its quarterly results. The brokerage has also increased the target price for the share from Rs 1190 to Rs 1490, according to a report by Moneycontrol.
Morgan Stanley stated that the medium-term outlook for the stock is positive.
Tech Mahidra Q4 results
Tech Mahindra released the results of the fourth quarter of the financial year 2024 on April 25. The IT firm’s consolidated revenue from operations dropped 6.2 per cent year-on-year to Rs 12,871.3 crore in the March quarter compared to Rs 13,718 crore in the same quarter a year ago. In the January-March quarter, the company’s net profit tanked nearly 41 per cent YoY to Rs 661 crore against Rs 1,118 crore in March quarter of FY23. However, sequentially net profit increased 29.6 per cent from Rs 510 crore in the December quarter.
The company’s board of directors also approved a dividend of Rs 28 per share for FY24.