The shares of Tech Mahindra gained focus on Tuesday, recording fresh highs, after the company reported strong results for Q2 FY 2022.

At 12:03 pm, Tech Mahindra was trading at ₹1560.90 on the BSE, up ₹36.50 or 2.39 per cent. It recorded a fresh 52-week high of ₹1629.40. It had opened at ₹1569.70 as against the previous close of ₹1524.40. It recorded an intraday low of ₹1554.00.

On the NSE, it was trading at ₹1,560.75, up ₹36.65 or 2.40 per cent. It recorded a new 52-week high of ₹1,630.

The company on Monday posted a 25.8 per cent year-on-year growth in profit after tax for the second quarter of FY22 at ₹1,339 crore compared to ₹1,064.6 crore in the same quarter last fiscal. On a sequential basis, profit was down by 1.1 per cent.

The company’s revenue during the reporting quarter was its highest over the past decade. Revenue increased 16.1 per cent YoY to ₹10,881 crore against ₹9,371.8 crore in Q2FY21. It was up 6.7 per cent QoQ.

Its deal wins for the quarter was around $750 million. Key verticals CME grew 6.7 per cent while enterprise segment grew 6.3 per cent.

The company’s board announced a special dividend of ₹15 per share.

Brokerages bullish

Brokerages remain bullish on the stock citing deal momentum and robust outlook.

IDBI Capital upgraded its rating for the stock from Hold to Buy with a target price of ₹1770

“TechM expects deal momentum to continue in coming quarters. This coupled with robust outlook in healthcare, BFSI, Hi tech and communication coupled with hiring of 14930 & doubling of fresher represents healthy revenue visibility,” it said.

Emkay gave the stock a Buy rating with a rateget price of ₹1,870. It also raised the FY22-24E EPS by 1.3-2.6 per cent, factoring in the Q2 beat and recently announced acquisitions.

Axis Securities also gave the stock a Buy rating with a target price of ₹1700 with a 12 per cent upside.

Motilal Oswal Research, however maintained a Neutral rating on the stock with a target price of ₹1,640, citing added risk due to stretched metrics.

“TechM's huge exposure to the Communications vertical remains a potential opportunity as a broader 5G rollout can lead to a new spending cycle in this space. The company is seeing traction in 5G investment. We expect a gradual improvement in EBIT margin, given the levers around productivity and cost optimization. Elevated operating metrics and supply-side pressures remain a risk to our margin estimates,” it said adding that it expects the company to deliver mid-teens growth in FY22.