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Last Updated : May 29, 2017 11:02 AM IST | Source: Moneycontrol.com

Tech Mahindra at 43-month low, plummets 17% post poor Q4 results

The IT services major posted a consolidated net profit for the March quarter at Rs 589.7 crore, a fall of 30.2 percent against Rs 845 crore quarter on quarter.

 
 
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Tech Mahindra lost nearly 17 percent intraday on Monday as investors reacted negatively to the company’s results. The stock was at its 43-month low

The IT services major posted a consolidated net profit for the March quarter at Rs 589.7 crore, a fall of 30.2 percent against Rs 845 crore quarter on quarter.

A poll of analysts by CNBC-TV18 had pegged the net profit at Rs 788 crore.

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The company’s consolidated rupee revenue came in around a percent lower at Rs 7,495 crore against Rs 7,557.5 crore QoQ.

Meanwhile, its dollar revenue came in higher by over a percent at USD 1,131.2 million against USD 1,116.1 million posted during the previous quarter.

The stock has shown weak movements, falling 15 percent in the past one month, while its three-day loss was seen at 13 percent. At 09:19 hrs Tech Mahindra was quoting at Rs 364.20, down Rs 65.15, or 15.17 percent on the BSE. It touched a 52-week low of Rs 363.10.

Brokerages too had a negative outlook on the stock. A look at what top analysts are talking about the stock.

Brokerage: JPMorgan | Rating: Neutral | Target: Rs 410

JPMorgan said that the company’s near term outlook on margins seems uncertain and any sign of improvement in it will be evident only in second half of this fiscal. Further, it added that there is a need to see how the firm plans to address its profitability.

Brokerage: Morgan Stanley | Rating: Equalweight | Target: Rs 455

The global investment bank believes that a margin miss in the fourth quarter is driving the sharp cut in earnings per share (EPS) estimates. In fact, a recovery in margin is likely to be only gradual. On the estimates, it feels that steep cut in estimates would be reflected in the stock price. A sharp correction in the stock may offer opportunity for long-term investors, the brokerage added.

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First Published on May 29, 2017 09:23 am
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