Sharp stock gains, 5G uncertainty cap further upsides for Tech Mahindra

Shares of IT major Tech Mahindra hit a fresh all-time high on Tuesday on expectations of improving margin trajectory, steady sales growth led by a robust order book and potential 5G growth opportunities. Tech Mahindra’s margin performance has been volatile over the years, unlike other Tier 1 peers and has remained a key concern for investors.

The software services exporter has guided for a 15 per cent margin at the Ebit or earnings before interest and taxes level in FY22. This is over 100-130 basis points above what the street has been working with and thus was positive for the stock.