Synopsis:
Tech Mahindra Ltd is in focus after Life Insurance Corporation of India has increased its stake by 2 percent.
A large-cap company, that provides IT enabled service, application development and maintenance, consulting and enterprise business solutions, is in the spotlight after Life Insurance Corporation of India has increased its stake by 2 percent, reflecting strong institutional confidence in the company’s growth prospects.
With the market capitalization of Rs. 1,50,833.00 crore, the shares of Tech Mahindra Ltd trading at Rs. 1,539.90, up by 0.55 percent from its previous day’s close price of Rs. 1,531.50 per equity share.
What’s the News?
Life Insurance Corporation of India (LIC) has increased its stake in Tech Mahindra by 2.004 percent, raising its total holding from 8.836 percent to 10.84 percent, reflecting continued confidence in the company’s growth prospects.
As of June, the company’s shareholding pattern shows promoters holding the largest chunk at 34.99 percent, followed closely by domestic institutional investors (DIIs) at 32.13 percent and foreign institutional investors (FIIs) at 23.28 percent. The public holds 9.43 percent of the shares, while the government has a minimal stake of 0.17 percent.
About the Company
Tech Mahindra Limited, incorporated in 1986 and based in Pune, provides information technology (IT) services and solutions globally, operating across the Americas, Europe, India, and other international markets.
The company operates through IT Business and Business Process Services (BPS) segments, offering application development, intelligent automation, cloud consulting, engineering and network services, data analytics, and artificial intelligence solutions.
In addition, Tech Mahindra delivers business process services including consulting, BPaaS, service desk, supply chain, finance and accounting, customer experience, cybersecurity, blockchain, and metaverse solutions.
The company also provides specialized platforms and software like Yantr.ai, Kornea, Populii, AceFin, AftEAZE, netOps.ai, MobiLytix, Epselon, Entellio, Blue Marble, and InfoWise, serving sectors such as banking, communications, energy, healthcare, insurance, manufacturing, media, retail, travel, and logistics.
Also Read: 6 Stocks that delivered up to 30% returns in one month after mutual funds bought stakes in the companies
Financial Outlook
In Q1FY26, the company reported revenue of Rs. 13,351 cr, up 2.6 percent YoY from Rs. 13,006 cr in Q1FY25 but slightly down 0.2 percent QoQ from Rs. 13,384 cr in Q4FY25. Profit rose 30.6 percent YoY to Rs. 1,129 cr from Rs. 865 cr in Q1FY25 and remained largely stable QoQ, slightly below Rs. 1,142 cr in Q4FY25, indicating strong earnings growth despite flat revenue.
A return on equity (ROE) of about 14.6 percent, a return on capital employed (ROCE) of about 18.6 percent and debt to equity ratio at 0.07 demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 33.2x higher as compared to its industry P/E 30x.
Written by Akshay Sanghavi
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