CLSA has downgraded Tech Mahindra stock to a “Hold” rating, citing the company’s recent strong stock rally and stretched valuations. The firm has set a target price of ₹1,670 for the stock.
The downgrade comes as part of CLSA’s broader outlook on the global telecom sector, which remains weak in terms of capital expenditure (capex). Despite high deal wins, the sector’s overall investment is subdued, and the commercialization of enterprise 5G remains distant due to a lack of compelling use cases.
Tech Mahindra may encounter multiple near-term challenges, particularly within its telecom vertical, said CLSA. It adds that unlike its peers such as TCS, Infosys, GartnerHCL, and Wipro, Tech Mahindra has not announced any significant cost optimization deals recently. This could further impact its performance in the coming months.
