One tech stock unbothered by markets frenzy selling, rises 7%. Should you buy?
2 min read . Updated: 13 Mar 2023, 07:50 PM IST
Premium- The reason why Tech Mahindra could not face the heat from the panic selling due to the US banks failure saga, was that the company roped in Mohit Joshi as the new Managing Director and Chief Executive Officer.
Pune-based technology company, Tech Mahindra escaped bears on Monday emerging as the sole gainer on the benchmark Sensex. Today, the broader markets were taking a massive beating as investors held a panic selling after three banks' failure in the US which jolted global cues rapidly. But Tech Mahindra was unbothered!
Overall, in the day, Tech Mahindra's share price climbed by nearly 10% on BSE with an intraday high of ₹1,164.50 before closing hours.
However, the stock ended at ₹1,133.60 apiece --- skyrocketing by 6.83%. The company's market cap is around ₹1,10,413.17 crore.
Tech Mahindra was the only stock on the 30-scrip Sensex to be in the green. Meanwhile, Sensex closed at 58,237.85 down by 897.28 points or 1.52%, and Nifty 50 plunged by 258.60 points or 1.49% to end at 17,154.30.
Broadly, all sectoral indices were in the red with a downside between 1% to 2%. Only the power sector saw a marginal downside. Banking stocks were the top losers.
Then why did Tech Mahindra shares rise?
The reason why Tech Mahindra could not face the heat from the panic selling due to the US banks failure saga, was that the company roped in Mohit Joshi as the new Managing Director and Chief Executive Officer.
Joshi will join Tech Mahindra for a period of 5 years from December 20, 2023, to December 19, 2028.
Investors cheered the soon-to-take-charge CEO and MD at Tech Mahindra. Joshi will join the Mahindra Group's IT flagship from Infosys where he currently serves as the President.
He has over two decades of experience in the Enterprise technology software and consulting space and has worked with the largest corporations in the world in driving digital transformation and building thriving businesses.
Sumit Pokharna, Research Analyst, and Vice President, of Kotak Securities said, "We believe Mohit has the right credentials to drive consistent revenue growth and profitability. Mohit has a strong foundation across multiple facets of the business viz—domain, technology, sales and marketing processes, large deals, etc.
According to Kotak Securities analyst, Tech Mahindra has many building blocks in place namely scale, reasonable breadth of capabilities, leadership in the telecom vertical, and a good presence in manufacturing. It can do with better discipline in deal pursuits, execution, and a higher emphasis on the build over buy decisions."
Further, Pokharna also said, "We believe Margin improvement and its sustainability is the key to re-rating, going forward. We are bullish on Tech Mahindra and believes that the stock trades at inexpensive valuations. Long-term investors can BUY the stock with a target price of Rs1,240."
