The share price of Tech Mahindra has been going through a sell-off phase since the beginning of the new year 2022. In year-over-year (YTD) time, this IT stock has fallen from approx. from 1784 1108 level, a drop of about 40 percent over the period. According to stock market experts, shares of Tech Mahindra have strengthened after heavy selling by FIIs. He added that like any other IT company, Tech Mahindra is also facing employee exodus and FII sales. In March 2021, FII stake in Tech Mahindra was around 39.5 per cent which has come down to around 34.3 per cent in March 2022. He further said that the IT stock may decline some more and it may go up. 1050 level in the near term. However, he advised positional investors to deposit shares of Tech Mahindra 1,000 to 1,050 areas.
Speaking on the reasons pulled down Tech Mahindra SharesAvinash Gorakshakar, Head of Research, Profitmart Securities, said, “Tech Mahindra shares have declined due to three key reasons – shortage of staff, FII sales and weakness in Nasdaq-listed US IT stocks. More than any other IT company in India. Like, Tech Mahindra is also facing high attrition rate of its employees due to which its input cost has increased. Moreover, Tech Mahindra has remained the preferred stock of FIIs since pre-Covid times. In FY 2012 , FII stake in Tech Mahindra has fallen from around 39.5 per cent to 34.3 per cent. Therefore, Tech Mahindra has become a victim of FII selling, which intensified after the US Fed went neutral to hike interest rates “
Avinash Gorakshakar further said that Indian IT companies follow US IT companies as they get business from US IT companies through outsourcing. As US stocks remain tense, which is reflected in the performance of tech heavy Nasdaq over the past few months, the overall sentiment for IT companies in global markets has turned negative. Hence, shares of Tech Mahindra have declined despite being a quality stock and delivering better quarterly numbers than its peers.
On Tech Mahindra share price outlook, Mudit Goyal, Senior Research Analyst, SMC Global said, “Tech Mahindra stock is looking weak on the chart pattern and may go up. 1,050 each level in the near future.”
For stock market investors who want to buy Tech Mahindra at such a discounted price, Rohit Singre, AVP – Technical Research at Bonanza Portfolio said, ” 1,000 to 1,050 each level looks like a good accumulation zone for positional investors. Therefore, those who have shares of Tech Mahindra in their portfolio can deposit more in this area, while new buyers can add TechM to their portfolio in this area and maintain the stop loss. 950 level. If the stock remains in the given zone, then we can expect a strong bounce in the counter and it can give a rally of 10-15 per cent in the near term.”
Avinash Gorakshakar of Profitmart Securities with views from Rohit Singre said TechM will be one of the major beneficiaries of 5G roll out in India. As the Indian government has made it clear that the 5G roll out in India will be purely a ‘Made in India’ affair, TechM share price may see a sharp jump in the next 4-5 years, when it is out of the consolidation phase. will come.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not Mint