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Financial services firm Morgan Stanley expects a pick up in Tech Mahindra's telecom vertical, maintaining the stock's Overweight rating with a target price of Rs 830.
"We believe the share price will rise relative to the country index over the next 60 days," Morgan Stanley said in a research note.
Morgan Stanley added that it expects Tech Mahindra to show an improved revenue growth trajectory over the next two quarters.
In FY20, the Mumbai-based company's exit margins will be strong and will offset wage hike pressures, Morgan Stanley estimates.
Tech Mahindra valuations are at an attractive premium to peers such as HCL Technologies, Morgan Stanley.
"We expect Tech Mahindra, with a superior revenue and operating profit growth profile, to trade at a premium to these peers and close the P/E discount to that of Infosys," the financial services firm said in the research note.
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