Tech Mahindra Ltd, one of India's leading IT services companies, has been a significant player in the technology sector, and its share price has been a subject of interest for investors. Here’s a detailed look at the current trends and key metrics surrounding Tech Mahindra’s share price.
Current Share Price and Market Performance
As of the latest trading session on September 26, 2024, Tech Mahindra's share price stood at ₹1,656.05, marking a 0.78% increase from its previous close of ₹1,643.25.
The stock has shown a notable performance in recent months, with a 10.15% gain in the last month and a 19.23% increase over the past three months. On a yearly basis, the stock has risen by 31.39%, and over the last five years, it has delivered a substantial return of 133.41%.
Key Financial Metrics
Tech Mahindra's financial health is reflected in several key metrics:
- **Market Capitalization**: The company has a market capitalization of approximately ₹1,60,690 crore.
- **Price-to-Earnings (P/E) Ratio**: The P/E ratio stands at 64.34, which is relatively high compared to the industry average.
- **Earnings Per Share (EPS)**: The EPS on a trailing twelve-month (TTM) basis is ₹25.74.
- **Price-to-Book (P/B) Ratio**: The P/B ratio is 5.66, indicating a premium valuation relative to its book value.
- **Dividend Yield**: The dividend yield is 2.42%, which is attractive for income-seeking investors.
Dividend Payout and Financial Health
Tech Mahindra has a history of maintaining a healthy dividend payout. The company has consistently distributed dividends, with a dividend payout ratio of 96% in recent years.
The Return on Equity (ROE) for Tech Mahindra is 8.63%, and the Return on Capital Employed (ROCE) is 11.9%, indicating reasonable profitability.
Sales and Profit Growth
Despite the strong share price performance, Tech Mahindra has experienced a revenue contraction for the first time in three years, with sales de-growing by 2.47%. This contraction is a significant point for investors to consider.
The company's compounded sales growth over the past five years has been 8.40%, which is relatively modest compared to its peers.
Analyst Recommendations and Market Sentiment
Analysts have mixed views on Tech Mahindra. Some recommend a "HOLD" or "REDUCE" stance, while others suggest a "BUY" with varying target prices. For instance, Prabhudas Lilladher has a target price of ₹1,340, while JM Financial suggests a target of ₹1,760.
Technical Analysis
From a technical perspective, Tech Mahindra's stock has observed a bullish breakout, indicating potential for further upward movement. The stock's performance is closely watched by technical analysts, who note that the 14-day moving crossover has appeared recently, a signal that has historically led to an average price gain of 2.69% within seven days over the last five years.
Conclusion
Tech Mahindra's share price reflects a complex interplay of financial performance, market sentiment, and technical indicators. While the company's strong dividend payout and global presence are positives, the recent revenue contraction and high P/E ratio are factors that investors should carefully consider.
For investors looking to make informed decisions, it is crucial to weigh these factors against broader market trends and analyst recommendations. As with any investment, thorough analysis and caution are advised to navigate the complexities of the stock market.
