Tech Mahindra Ltd. SURGE 7% AFTER STRONG Q2

Tech Mahindra shares rallied more than 7% on Friday, emerging as the top gainer on the Nifty 50, after the IT services major delivered better-than-expected results for the second quarter of the financial year. Strong deal wins, improving operating margins and positive brokerage commentary further boosted investor sentiment. The stock jumped 7.3% in morning trade, taking its year-to-date gains to 9.8%. In comparison, the Nifty 50 declined 11.5% over the same period. Tech Mahindra’s market capitalisation stood at around Rs 1.73 lakh crore. Global brokerage HSBC maintained its ‘Buy’ rating on the stock with a target price of Rs 1,800 per share, indicating an upside potential of approximately 9% from Thursday’s closing price. According to HSBC, the company’s second-quarter performance came in slightly ahead of expectations, while its growth momentum remained stronger than that of several leading IT industry peers. Tech Mahindra reported an 8.2% quarter-on-quarter rise in consolidated net profit to Rs 1,586 crore for the September quarter, compared with Rs 1,465 crore in the preceding quarter. Revenue in dollar terms increased 2% sequentially to $1.693 billion, exceeding the Street’s estimate of $1.682 billion. The combination of better-than-expected financial performance, healthy deal momentum and improving margins helped drive the sharp rally in the company’s shares.