Shares of Tech Mahindra Ltd fell sharply in Thursday's trade after the IT company recorded a slump in its third-quarter (Q3 FY24) net profit. The stock slipped 6.09 per cent to hit a day low of Rs 1,322 against a previous close of Rs 1,407.75. The counter, which scaled its one-year high level of Rs 1,416 a couple of days back, has risen around 28 per cent in the past one year.
The fifth-largest Indian IT services firm's net profit fell to Rs 510 crore for the three months ended December 31, 2023, down 60.6 per cent from Rs 1,297 crore a year earlier.
This is the first quarter since Mohit Joshi took over as the chief executive officer of the company from former CEO CP Gurnani.
During the quarter under review, TechM reported a revenue of Rs 13,101 crore. Operating margins slipped 660 basis points (bps) to 5.4 per cent from the same period last year, while new deal wins more than halved to $381 million from $795 million.
The firm's growth was hit due to a weakness in the communications, media and entertainment vertical, its largest in terms of revenue, which dropped 13.4 per cent.
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TechM CEO Joshi said the outcome was "mixed" for the quarter, with growth in the manufacturing and healthcare segments, but spending remained muted in areas like communications, BFSI and hi-tech.
India's $245-billion IT industry has been hurting due to an uncertain demand environment as clients cut back on spending amid inflation and recession fears.
On technical setup, the stock was seen trading lower than the 5-day and 10-day simple moving averages (SMAs) but higher than the 20-day, 30-, 50-, 100-, 150-day and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 54.54. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The company's stock has a price-to-equity (P/E) ratio of 45.86 against a price-to-book (P/B) value of 5.90.
As of December 2023, promoters held 35.11 per cent stake in the IT firm.
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