Rich valuations could be a drag on Tech Mahindra stock: Analysts

Mumbai: Tech Mahindra dropped 2.7% on Thursday, emerging as the biggest Nifty loser, after the company’s first-quarter results fell short of expectations. The stock closed at ₹1,564.2.

Analysts said management expects FY27 revenue growth above peers and a pickup from next quarter, but remain divided over the stock’s prospects citing rich valuations. JP Morgan said the stock is at 25 times estimated price to earnings (PE) ratio, which is at a premium to peers and ‘bakes in’ the margin improvement. The brokerage has a ‘neutral’ rating on the stock and a target price of ₹1,550, implying a downside potential of 0.9% from Thursday’s close.