Tech Mahindra Shares Continue Downtrend As Analyst Downgrades Rating

Shares of Tech Mahindra continued to slump for the second straight session as Bank of America downgraded the stock’s rating as it expects margin expansion to be slow.

What Happened: BofA downgraded the stock’s rating from ‘buy’ to ‘underperform’ with a price target of ₹1,040. The target price translates to a 6% downside from the stock’s last closing price of ₹1,108.95. Earlier this month, the company announced the appointment of Infosys‘s Mohit Joshi as MD and CEO. The announcement saw the company’s shares surge 6%, however, analysts were not very thrilled about the appointment.

See Also: Sonata Software Shares Hit Another 52-Week High: What’s Driving The Surge?

In their note, BofA also said that it would take around 12 to 18 months for the leadership change to start having a positive impact. The analyst expects margin expansion to be slow owing to a weak outlook.

Domestic Brokerage firm ICICI Securities also has a ‘reduce’ rating on the stock with a price target of ₹971.

Price Action: Shares of Tech Mahindra were down 1.33% to trade at ₹1,094.15 as the markets opened on Tuesday.

Read Next: Anand Mahindra’s Conviction In India’s ‘World-Beating’ Retail Revolution Grows