Synopsis : Tech Mahindra shares slipped over 2% after reporting a sequential revenue dip, sparking a split among brokerages on its near-term outlook. While Nuvama remains cautious due to margin pressures, Motilal Oswal sees the ongoing restructuring as a strong turnaround play.
Tech Mahindra’s share price fell over 2% to an intra-day low of Rs 1,572.30 on July 17, becoming a notable loser on the Nifty 50 after the company posted a 1.4% revenue dip sequentially. This decline comes despite decent deal wins, leaving brokerages divided on whether the stock is a turnaround opportunity or a risky hold in the current market.
Nuvama Institutional Equities highlighted that while Tech Mahindra’s deal wins remain strong, the challenges around margin expansion could persist, especially amid weak macros and low growth. The brokerage trimmed its FY26 and FY27 estimates and maintained a ‘Reduce’ rating with a target price of Rs 1,300, implying a potential 19% downside from current levels.
In contrast, Motilal Oswal views Tech Mahindra’s ongoing restructuring under new leadership as a positive trajectory, citing the company’s strong deal TCV performance of $809 million, up 51% YoY. They reiterated a ‘Buy’ rating with a price target of Rs 2,000, indicating an upside of 24% and positioning the IT major as a potential bottom-up turnaround play.
For investors, Tech Mahindra’s current valuation, deal pipeline, and restructuring progress will be critical indicators to watch, as the stock navigates through margin challenges while seeking to capture upside in a recovering IT landscape.
Disclaimer : This article is for informational purposes only and does not constitute financial advice. Please consult a certified financial advisor before making investment decisions.
