After hitting record high, will Tech Mahindra bridge valuation gap with Infosys?

NEW DELHI: Tech Mahindra NSE 1.20 %’s September quarter results beat Street estimates, with a decade high sequential growth in revenues, which sent its shares soaring to a record high on Tuesday morning. Analysts said the stock is up for a rerating and eye room for more upside going ahead.

Foreign brokerage CLSA sees a case for continued rerating for the stock. It said the strong Q2 beat, sustained growth outlook and improved capital return could support valuations further despite a 32 per cent rerating in the last three months. Tech Mahindra trades at a 25 per cent discount to Infosys NSE 0.88 % compared with a 5-year median of 22 per cent, CLSA said while suggesting a target of Rs 1,720 on the stock.